Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Private Bills contributing to Relief of Unemployment (Bill certified as a whole),

Mr. SPEAKER laid upon the Table a Certificate of the Lord Privy Seal, pursuant to the Order of the House of the 11th day of December last, that it appeared to him that the Newcastle-upon-Tyne Corporation (Quay Extension, &c.) Bill [Lords] is a Bill which contains provisions relating to works the execution of which would substantially contribute to the early relief of unemployment.

Kingston-upon-Hull Corporation Bill (King's Consent signified),

Read the Third time, and passed.

Manchester Extension Bill,

Read the Third time, and passed.

Bristol Corporation (No. 2) Bill,

As amended, considered; to be read the Third time.

Dartford and Purfleet (Thames) Tunnel Bill (Certified Bill),

As amended, considered; read the Third time (pursuant to the Order of the House of 11th December), and passed.

PIER AND HARBOUR PROVISIONAL ORDERS (No. 2) BILL,

"to confirm certain Provisional Orders made by the Minister of Transport under the General Pier and Harbour Act, 1861, relating to King's Lynn, Portsmouth, and Weymouth and Melcombe Regis," presented by Mr. Herbert Morrison; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 182.]

EAST INDIA (INDIA OFFICE, RETIREMENT AT SIXTY-FIVE).

Address for
Return of Copy of Minute by the Secretary of State for India, stating the circum-
stances under which an officer belonging to his permanent establishment has been retained in the service after he has attained the age of sixty-five."—[Mr. Benn.]

Oral Answers to Questions — INDIA.

CIVIL DISOBEDIENCE CAMPAIGN (ARREST OF MR. GANDHI).

Mr. HACKING: 1.
asked the Secretary of State for India whether he has anything to report to the House in connection with the recent rioting in India?

Lieut.-Colonel HENEAGE: 3.
asked the Secretary of State for India if he has any fresh statement to make on the conditions in India?

Mr. SHAKESPEARE: 18.
asked the Secretary of State for India whether His Majesty's Government has been in communication with the Government of India as to the arrest of Gandhi?

The SECRETARY of STATE for INDIA (Mr. Wedgwood Benn): As has been reported in the Press, Mr. Gandhi was arrested this morning and is detained under the Bombay State Prisoners' Regulation of 1827. In supplement to my reply of 29th April, I may say I have no official reports of fresh serious disturbances, but I have received an account of the riot in Madras on 27th April and also of an unsuccessful hartal attempted in Calcutta on the 1st May. As regards Peshawar, where conditions have been difficult since the riots on 23rd April, my information is that the authorities are in complete control of the situation. The Peshawar District has been declared a proclaimed area under the Seditious Meetings Act.

Lieut.-Colonel Sir FREDERICK HALL: Can the right hon. Gentleman reply to the last part of question No. 18 or is he not in a position to do so?

Mr. BENN: The hon. and gallant Gentleman will find that point covered in the reply which I have given.

Colonel WEDGWOOD: Under what conditions is Mr. Gandhi being kept in gaol, whether as a first-class misdemeanant or an ordinary prisoner?

Mr. BENN: I cannot say without notice.

Mr. BROCKWAY: Will Mr. Gandhi be charged and tried?

Mr. BENN: No, Sir. It is intended to keep him detained under the regulations.

Mr. BROCKWAY: In view of the serious position in India, will the right hon. Gentleman make a supreme effort to reach a settlement?

Mr. BENN: The policy of the Government in inviting a conference of Indian leaders stands despite everything that has happened.

Lieut.-Commander KENWORTHY: Is my right hon. Friend in a position yet to make a statement as to the cause of the trouble in Peshawar?

Mr. BENN: I can add nothing to the communiqué which has been issued.

Earl WINTERTON: Will the right hon. Gentleman obtain, as soon as possible, an account of what actually occurred at Peshawar in view of the fact that up to now the accounts which have appeared in the Press have been rather partial, and certain rumours have appeared which it is very desirable should be contradicted. Will the right hon. Gentleman see that by means of a written answer to a question or by some other means an account is published?

Mr. BENN: Perhaps my Noble Friend will allow me to deal with that matter when I answer question No. 19.

Mr. THURTLE: 6.
asked the Secretary of State for India the reason for the arrest of the 11 local congress leaders at Peshawar; and whether arrests of congress leaders are taking place only on the ground of alleged breaches of the law or whether leadership in the congress party, either national or local, is being regarded as sufficient ground for arrest?

Mr. BENN: I am informed that these arrests were made for breaches of the ordinary law, and so far as I know all recent arrests, except those made for precautionary reasons in Bengal under the Criminal Law Amendment Ordinance, fall within this description. There is, therefore, I believe, no foundation for the suggestion made at the end of my hon. Friend's question.

Sir HERBERT SAMUEL: Does the arrest of Mr. Gandhi fall within this description?

Mr. BENN: No, that is a special case.

Sir F. HALL: 19.
asked the Secretary of State for India the cause of the Native rioting at Peshawar on 23rd April, when the mob poured burning paraffin over two armoured cars and set them alight, two of the occupants being burned to death; whether any arrests have been made in connection with this outrage; and the number of soldiers, police, and British civilians who have been killed or seriously injured by rioters up to the present time?

Mr. BENN: I would refer the hon. and gallant Baronet to my answer to the Leader of the Opposition on 29th April.

Earl WINTERTON: Will the right hon. Gentleman consider, as soon as practicable, publishing a full and precise account, in view of the fact that it is very difficult to get anything but partial accounts from the newspapers, and that it is very desirable that this House and the public should be in full possession of what exactly did occur?

Mr. BENN: I quite agree, but I would remind the Noble Lord that the Government have already issued a communiqué on the events at. Peshawar. It shall be supplemented as soon as possible.

Mr. BROCKWAY: Has the right hon. Gentleman's attention been drawn to the report in the Press that armoured cars were driven over Indians lying in the streets, and cannot some statement be made regarding the facts of the case?

Mr. BENN: I saw the statement in the newspaper, but I have no other news of it.

Sir F. HALL: Is not the statement in the first part of this question, with regard to burning paraffin being poured over two armoured cars, and two of the occupants being burned to death as a result, absolutely true beyond question?

Mr. BENN: A communiqué has been issued on the matter, and shall be supplemented as soon as the circumstances permit. Beyond that, I really cannot say anything.

COTTON (IMPORT DUTIES).

Mr. HACKING: 2.
asked the Secretary of State for India whether he has anything further to report to the House regarding the increase in the Indian cotton import duties or in connection with the boycotting of Lancashire cotton goods in India?

Mr. BENN: The Bill providing for the new duties has been passed with the amendment stated in my reply to the hon. Member for South Kensington (Sir W. Davison) on 24th March. As regards the last part of the question, I have just heard from the Government of India that the efforts to establish a boycott of British and foreign goods have so far been mainly concentrated on cloth and have increased in intensity during the past 10 days. Some importers of cloth have given promises not to place further orders for some months, but so far few promises appear to have been given not to sell existing stocks.

Mr. HACKING: Can the Secretary of State take any action with regard to the latter part of the question to stop boycotting?

Mr. BENN: If the law is broken, no doubt action will be taken.

Mr. HACKING: In the interests of the Lancashire cotton trade can he do anything to make the situation easier?

Mr. MILLS: Is it not obvious that boycotting is one of the things that will arise out of a state of unrest?

Dr. VERNON DAVIES: Will the right hon. Gentleman bear in mind that he is a British Cabinet Minister and that he has certain duties to the people of this country?

MILITARY SERVICE (FAMILY PENSIONS).

Mr. WARDLAW-MILNE: 4.
asked the Secretary of State for India, what progress has been made with the arrangements necessary for carrying out the proposals in regard to the Indian military service family pensions contained in the circular letter issued by the India Office in July, 1927; and if he will explain the reasons for the continual delay in the fulfilment of the promise made to hasten a decision in this matter?

Mr. BENN: This question is bound up with the adjustment between the Indian
and Imperial Governments of a number of claims and counterclaims arising out of the War. I greatly regret the delay that has occurred, and I am sparing no effort to reach a settlement.

Mr. WARDLAW-MILNE: While I do not wish to press the right hon. Gentleman unduly, may I ask whether he is aware of the fact that this matter has been pending since the days of the War, and is it not rather hard on the widows of the men who served in the War to be told 10 or 11 years after the War that a settlement has not yet been possible between the home Government and the Indian Government?

Mr. BENN: I am fully conscious of the disadvantages arising from delay.

ORDNANCE DEPARTMENT.

Mr. MILLS: 5.
asked the Secretary of State for India if he is now able to announce his decision regarding the present disabilities suffered by the personnel, single and married, of the Indian Ordnance Department; whether be has now completed his inquiries into the present conditions governing leave passage; and, if so, can he state whether any reforms are contemplated?

Colonel HOWARD-BURY: 16.
asked the Secretary of State for India whether he has yet come to a decision over the representations and memorial of the Foremen's Association of India; whether any decision has been arrived at over the passage question or with regard to the independent committee asked for in 1927 by the Master-General of Supply to in quire into this and other causes of discontent among the foremen?

Mr. BENN: The most urgent point outstanding has been the grant of free passages, and these have now been given with effect from 1st April last. I am at the moment considering the remaining points represented by the Foremen's Association, including that mentioned by the hon. and gallant Member.

Colonel HOWARD-BURY: Is the right hon. Gentleman going to appoint a committee to go into their grievances for which they ask in the latter part of the question?

Mr. BENN: I cannot give any undertaking beyond what I have said in the answer which I have just given.

PALESTINE MOSLEMS.

Colonel HOWARD-BURY: 7.
asked the Secretary of State for India whether he is aware that at the All-India Muslim Conference for Palestine, held in Bombay, resolutions were passed protesting against the present treatment of their co-religionists in Palestine and arranging for the celebration of Palestine Day all over India, Burma, and Ceylon on 16th May; and whether he is taking any steps to allay the anxieties of the 70,000,000 Moslems in India, and has he had any correspondence with the Government of India on the subject?

Mr. BENN: I have received a telegram giving the resolutions adopted by the meeting referred to, and am in correspondence with the Government of India.

Colonel HOWARD-BURY: Is the right hon. Gentleman not aware that there is very great anxiety felt by the Mohammedans as to their position in Palestine, and can he make representations to the Secretary of State for the Colonies with regard to the great danger of the continuance of the present state of affairs in India?

Mr. BENN: I am well aware of the interest taken by Mohammedans in India in the state of affairs in Palestine.

Earl WINTERTON: Is the right hon. Gentleman aware that some of these resolutions were supported by some of the most responsible Moslems in India, and when he receives a copy of the resolutions will he see that they are sent to the Prime Minister and Secretary of State for the Colonies?

Mr. BENN: I think that has been done. If not, I will see that it is done.

Mr. THURTLE: Does the right hon. Gentleman not think that it is a very unfortunate thing to try to accentuate the differences between Moslems and Hindus?

INDIAN TROOPS, PESHAWAR.

Brigadier-General CLIFTON BROWN: 8.
asked the Secretary of State for India whether the disaffection of certain Indian troops at Peshawar last week was an isolated action; and whether they have been replaced by British troops?

Mr. BENN: I am informed by the Government of India that there has been no sign of any similar incident elsewhere. As announced last Tuesday, the battalion in question was withdrawn from Peshawar at once. It was replaced by a Gurkha battalion.

BRITSH FORCES.

Major-General Sir ALFRED KNOX: 9.
asked the Secretary of State for India what is the present strength of the British Forces in India; whether they are under establishment; and, if so, by what number?

Mr. BENN: The strength on 1st April last was approximately 59,700. The establishment is 59,915.

Brigadier-General CLIFTON BROWN: Is the right hon. Gentleman aware that a few months ago he stated in an answer to me that the number was 60,500, and that no change was contemplated? Has the number been reduced?

Mr. BENN: I will look into the disparity, if it exists.

EMIGRANTS, SOUTH AFRICA (RETURN).

Major GRAHAM POLE: 13.
asked the Secretary of State for India whether it is the intention of the Government of India to institute an inquiry into the arrangements in force in Northern India for the reception and care of emigrants returning from South Africa under the Cape Town agreement, similar to the review which is being made by the Government of the arrangements in force in Southern India?

Mr. BENN: I have no information regarding such arrangements in Northern India, but if my hon. and gallant Friend desires it I will inquire.

LEPER INSTITUTIONS.

Major POLE: 14.
asked the Secretary of State for India if he will state the total annual contribution made by the Central Government in India towards the upkeep of the leper institutions in India?

Mr. BENN: So far as I am aware no such contribution is made from central revenues. As public health is a transferred provincial subject, the matter is one for Provincial Governments whose position I stated on the 14th of last month.

LOCUSTS (DAMAGE TO CROPS).

Major POLE: 15.
asked the Secretary of State for India if any decision has been arrived at by the Council of Agricultural Research in respect of the steps to be taken to reduce the damage caused to crops in India by locusts?

Mr. BENN: I have not yet heard that any decision has been arrived at. I have however seen a report in the Press some time ago that a sub-committee has been appointed by the council to deal with the question.

NEWS.

Lieut.-Commander KENWORTHY: 17.
asked the Secretary of State for India to what extent news from India to this country is being censored?

Mr. BENN: Under the Telegraph Act of 1885, the Government of India have powers similar to those enjoyed by all the signatories to the International Telegraph Convention. As to the precise extent to which these powers are at present being exercised, I have no official information; but I am assured by the Government of India that, consistently with the needs of the situation, they will do everything they can not to impede the services rendered by the Press.

Lieut.-Commander KENWORTHY: Is my right hon. Friend satisfied that the truth about events in India is not being kept from the British public?

Mr. BENN: Certainly; questions have been asked and answered in this House.

Lieut.-Commander KENWORTHY: But is my right hon. Friend aware that he answers questions by saying that he himself only has information from the newspapers; and does he not think that it would be very unfortunate if there were any impression that there was difficulty in getting the truth about events in India?

Mr. BENN: If that impression exists, I hope that my hon. and gallant Friend will do his best to correct it.

Oral Answers to Questions — EGYPT.

TREATY NEGOTIATIONS.

Mr. WARDLAW-MILNE: 20.
asked the Secretary of State for Foreign Affairs whether he is now in a position to make a statement regarding the results of the Egyptian Conference?

Captain PETER MACDONALD: 22.
asked the Secretary of State for Foreign Affairs whether he can make any statement as to the progress of negotiations with the representatives of the Egyptian Government?

Mr. D. G. SOMERVILLE: 51.
asked the Secretary of State for Foreign Affairs if he can make any statement as to the hitch in the Anglo-Egyptian negotiations; and what is the exact cause of the delay in reaching an understanding?

The SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Arthur Henderson): As I informed the hon. and gallant Member for Gainsborough (Captain Crookshank) on the 9th April, negotiations were adjourned on that date, and were to be resumed to-day. The courier from Egypt, whose arrival the Egyptian Delegation wished to await, reached London a few hours ago, and negotiations will be resumed at five o'clock this afternoon.

MIXED COURTS.

Major LONG: 40.
asked the Secretary of State for Foreign Affairs whether it is proposed, if the proposals set out in the White Paper in regard to Egypt are accepted, to hand over to the mixed courts jurisdiction in matters of statut personnel; and, if so, how it is proposed the system will operate in view of the fact that there is no common territorial law of statut personnel in Egypt which the mixed courts could apply?

Mr. A. HENDERSON: Pending the conclusion of the present negotiations, I cannot say more than that the difficulties to which the hon. and gallant Member refers have been borne in mind.

Mr. WARDLAW-MILNE: 41.
asked the Secretary of State for Foreign Affairs whether, in the event of the proposals in the White Paper in regard to Egypt being carried through, Egyptians will be appointed to the posts of president and vice-president of the mixed court of appeal and to the presidency and vice-presidency of the first instance courts; and, if so, as an Egyptian will then be qualified to sit alone as president of the summary, referee, and adjudicative courts, how is it proposed to maintain the principle that the majority of judges hearing cases in the mixed courts shall be Europeans?

Mr. HENDERSON: The points raised by the hon. Member were not mentioned in the Proposals for an Anglo-Egyptian Settlement (Cmd. 3376) to which he refers, and have not been discussed during the present negotiations. No change of the nature suggested by the hon. Member can take place, except as a result of agreement between Egypt and the Capitulatory Powers.

Mr. WARDLAW-MILNE: If this is intended under the Proposals, what is the object of pressing a change in the mixed courts, which have nothing whatever to do with the Egyptian people?

Mr. HENDERSON: I have nailing to add to the answer.

Oral Answers to Questions — MEXICO (BRITISH BONDHOLDERS).

Mr. ARTHUR MICHAEL SAMUEL: 24.
asked the Secretary of State for Foreign Affairs whether he has, since 9th April, 1930, received any information as to the plans of the Mexican Minister of Finance with regard to the default of the Mexican Government's obligations to British holders of Mexican securities; and, if he has not, will he request His Majesty's representative in Mexico City to obtain from the Mexican Minister of Finance a definite statement as to the Mexican Government's intentions?

Mr. A. HENDERSON: No, Sir. His Majesty's Minister has repeatedly inquired of the Mexican Government their intentions in the matter, but has not yet been furnished with the information requested.

Mr. SAMUEL: Is the right hon. Gentleman aware that £150,000,000 of British savings was lent to Mexico, and that that confidence has been utterly abused; and does he not think that, quite independently of any international arrangement, he should take some action to protect these people?

Mr. HENDERSON: I do not know what the hon. Gentleman desires me to do. I have already said in my answer that we have made repeated requests for information. Does the hon. Gentleman want me to send a gunboat?

Mr. SMITHERS: Is the right hon. Gentleman aware that a new committee has
been set up in the State of Delaware to protect the interests of Mexican bondholders, and would it not be possible for the British Government to get into touch with that committee?

Mr. HENDERSON: I did not know of the existence of such a committee. If the hon. Member will put down a question, I will try to get information.

Mr. SAMUEL: Is the right hon. Gentleman going to do nothing to save this £150,000,000 of British money?

Oral Answers to Questions — RUSSIA.

TRADE AGREEMENT.

Sir A. KNOX: 25.
asked the Secretary of State for Foreign Affairs for what reason the Governments of South Africa and the Irish Free State are excluded from the commercial agreement lately signed with the representative in London of the Union of Socialist Soviet Republics?

Mr. SMITHERS: 28.
asked the Secretary of State for Foreign Affairs for what reasons South Africa and the Irish Free State are excluded from the provisions of the temporary commercial agreement with Russia; did these two countries give any reasons; and, if so, will he publish them in the form of a White Paper?

Mr. A. HENDERSON: Hon. Members will observe, from Command Paper No. 3552, that the Union of South Africa and the Irish Free State were excluded from the operation of the Temporary Trade Agreement at the express request of the respective Governments. The reasons which led His Majesty's Governments in the two Dominions to desire such exclusion are a matter for those Governments, and not for His Majesty's Government in the United Kingdom.

Sir A. KNOX: Can the right hon. Gentleman say whether the reason for that policy was that these two Governments like the Bolshevik Government less than he does?

Mr. SMITHERS: Did His Majesty's Governments in these two Dominions give any reasons for not coming into the commercial agreement?

Mr. HENDERSON: I have nothing to add to the answer that I have already given.

Sir WILLIAM DAVISON: 33.
asked the Secretary of State for Foreign Affairs why the clauses relating to hostile and subversive propaganda which were contained in the previous trade agreement with Russia have been omitted from the agreement which has just been signed; and whether he can assure the House that the pledge in the above respect given by the Soviet Ambassador on the resumption of diplomatic relations in December last has been carried out both in this country and in India and the Dominions?

Mr. HENDERSON: As regards the first part of the question, the exchange of Notes which was laid before this House in Command Paper No. 3467 obviated the necessity for any propaganda clause in the Temporary Commercial Agreement of 16th April last. As regards the second part of the question, His Majesty's Government in the United Kingdom have not had occasion, either on their own behalf or at the instance of any Dominion or India, to make any formal representation to the Soviet Government. The attitude of His Majesty's Government in this matter remains as stated by me to the House in a reply to the right hon. Gentleman the Member for West Woolwich (Sir K. Wood) on 10th March.

Sir W. DAVISON: Has the right hon. Gentleman's attention been drawn to the case at Manchester last week of a notorious member of the Third International, who was specially sent to this country for the purpose of fomenting strikes and raising difficulties? Will the right hon. Gentleman answer the question? It is very important.

Mr. HENDERSON: It is a question of judgment as to whether it is important. I have seen the statement in the Press and that is all I know about it.

Earl WINTERTON: When the right hon. Gentleman says the Government have no occasion to make representations on behalf of the Government of India, do I understand him to say the pledge has been carried out by the Union of Soviet Republics in regard to India, and that Bolshevist propaganda in that country has ceased since December last?

Mr. HENDERSON: I want the Noble Lord to understand what I say. I have received no representations on the point.

Sir W. DAVISON: 34.
asked the Secretary of State for Foreign Affairs whether, in recognising the right of the Russian Soviet Government to succeed to certain properties of the former Tsarist Government under the new trade agreement, he has obtained similar recognition from the Soviet Government as to their responsibility for the debts incurred by their predecessors?

Mr. HENDERSON: If the hon. Member is referring to the declaration by the Soviet Ambassador appended to the Temporary Commercial Agreement of 16th April, I would observe that this is simply a declaration by the Soviet Government of their claim to the ownership of certain property, and does not connote any recognition of this claim on the part of His Majesty's Government. The last part of the question does not, therefore, arise.

Sir W. DAVISON: Why is this special notification put on the White Paper giving the terms of the agreement when, at the same time, no equivalent statement is made to the British Government as to the debts of the previous Tsarist Government?

Mr. HENDERSON: I have nothing to add. I say it does not connote that we accept responsibility.

Sir W. DAVISON: 35.
asked the Secretary of State for Foreign Affairs for what reason the official Soviet trade representative is to be exempted, under Article 2 (4) of the new trading agreement, from responsibility for the acts of State economic organisations, except in cases where such responsibility has been clearly accepted by the trade representative acting for and on behalf of the Soviet Government?

Mr. HENDERSON: Under Article 2 of the Temporary Commercial Agreement the Soviet Government accept responsibility for all transactions lawfully concluded in the United Kingdom by the Trade Delegation. But, owing to the existence in the Soviet Union of certain economic organisations and syndicates which are not directly responsible in the first instance to the Soviet Government for transactions into which they enter,
it is possible that British traders might, in the absence of some such Clause as that contained in Paragraph 4 of Article 2, make contracts with these organisations and syndicates under the impression that the Soviet Government were, at the time when the transaction was concluded, a party to its details. The paragraph in question has, therefore, been inserted purely in order to protect the British trader, by defining clearly the legal liability of the Soviet Government.

Sir W. DAVISON: Is it not a fact that all trade with Russia is Government trade and, for that reason, it is receiving diplomatic immunity? Why should this special reservation be made in the agreement, which will be most misleading and difficult for traders to observe?

Mr. HENDERSON: I am not satisfied that all trade is Government trade.

Captain CAZALET: 36.
asked the Secretary of State for Foreign Affairs whether the diplomatic privileges accorded to the Russian Trade Delegation include the relief of rates on buildings usually accorded to Embassies and Legations?

Mr. HENDERSON: The agreement with the Government of the Union of Soviet Socialist Republics on the subject of rates on the diplomatic premises of the two parties lapsed when diplomatic relations were broken off and has not yet been put into force again. When this has been done, the premises of the Trade Delegation will be exempted from the payment of the usual proportion of rates, in accordance with the terms of the Trade Agreement, whereby the Trade Delegation forms part of the Embassy of the Union of Soviet Socialist Republics. Similar relief from local taxation will, no doubt, be granted to all the premises occupied by His Majesty's Embassy at Moscow. I may remind the House that, up to the rupture of relations in 1927, the premises of the Trade Delegation enjoyed a corresponding measure of relief from rates.

Captain CAZA LET: To how many buildings will this apply? If representatives of the commercial delegation take up other buildings, will this immunity apply?

Mr. HENDERSON: I have put the position before the House that there have to be two officials under a chief, and their
offices have to be immune. Those offices will be in one building.

Sir AUSTEN CHAMBERLAIN: Do any of the offices include show rooms?

Mr. HENDERSON: I must have notice of that question.

Sir NICHOLAS GRATTAN-DOYLE: 53.
asked the Secretary of State for Foreign Affairs the names of the trade representative of the Union of Socialist Soviet Republics and his two deputies to whom are accorded diplomatic privileges and immunities?

Mr. HENDERSON: I have not yet been officially notified of the names of the officials who will occupy these positions.

Sir A. KNOX: 26.
asked the Secretary of State for Foreign Affairs the reason for granting diplomatic privileges and immunities not only to the Soviet trade representative and his two deputies, but also to the offices they occupy, in view of the fact that no other foreign traders in London enjoy such privileges?

Mr. A. HENDERSON: I would refer the hon. and gallant Member to my reply of Tuesday last to the hon. Member for Gravesend (Mr. Albery).

Mr. GODFREY LOCKER-LAMPSON: Is not diplomatic immunity for commercial officials an entirely new principle, which has never been granted before?

Mr. HENDERSON: The right hon. Gentleman put that question to me last Tuesday, when I said that I did not know that it was new. If the right hon. Gentleman wishes for further information, he must put down a question.

Mr. THURTLE: Is not the existence of a State which does its trading on a national scale an entirely new fact?

FISHERIES (BRITISH VESSELS).

Lieut.-Commander KENWORTHY: 31.
asked the Secretary of State for Foreign Affairs what arrangements have been come to with regard to British vessels fishing off the Murmansk coast arising out of the Russian trade agreement; and what distance from the coast is claimed by the Union of Soviet Socialist Republics as territorial waters?

Mr. HENDERSON: A Temporary Fisheries Agreement, distinct and separate from the Temporary Commercial Agreement, is at present under negotiation with the Soviet Government in accordance with the provisions of the Protocol of 3rd October last. The instrument, on the terms of which a substantial measure of agreement has already been reached, will deal, inter alia, with the point mentioned in the second part of the question. The hon. and gallant Member will, however, appreciate my inability to enter into details at this stage.

Lieut.-Commander KENWORTHY: Can the right hon. Gentleman assure the fishing industry that he will not recognise any extension of the three-mile limit?

Mr. HENDERSON: I have already answered that I cannot go into details at this moment. The House will have a full opportunity of discussing the matter when the Treaty comes up for ratification.

BRITISH CLAIMS.

Mr. SMITHERS: 27.
asked the Secretary of State for Foreign Affairs whether any settlement has been reached with regard to Soviet debts, in view of the declared policy of His Majesty's Government that negotiations for a trade treaty and settlement of debts and claims will proceed concurrently; and is it now the policy of the Government to make the ratification of a full-trade treaty conditional on a simultaneous settlement of debts and claims?

Mr. A. HENDERSON: As regards the first part of the question, agreement has now been reached with the Soviet Government for the establishment of a joint committee of experts and a number of sub-committees for the purpose of examining the bases of settlement of the questions outlined in paragraph 1 (3) of the Protocol of 3rd October. As regards the second part of the question, I have nothing to add to my reply to the supplementary question put by the hon. Member on Wednesday last.

Mr. SMITHERS: Does not the right hon. Gentleman realise that, if he signs a trade agreement with the Soviet Government, he will have no weapon for negotiation for the settlement of debt?

Mr. HENDERSON: That is a matter of opinion.

Sir F. HALL: Is it not a matter of common business knowledge?

LENA GOLDFIELDS COMPANY.

Mr. MILLS: 50.
asked the Secretary of State for Foreign Affairs whether any officials of the Lena Goldfields Company have been acting as agents of His Majesty's Government; and, if so, in what capacity?

Mr. A. HENDERSON: There is no foundation for any suggestion which may have been made that the Lena Goldfields Company or any of its officials were in the employ of, or used for any purpose by, any Department of His Majesty's Government. I may add that no suggestion to this effect has been brought to the notice of His Majesty's Government by the Soviet Government.

Mr. MILLS: Is the Foreign Secretary aware that these statements have received wide publicity in the Conservative Press in this country?

Earl WINTERTON: Is the right hon. Gentleman aware that the Crown Prosecutor or the prosecutor for the Bolshevist Government in Russia is charging these men with being agents of the British Government, and in order to save their lives will he instruct the British Minister in Moscow to represent to the Bolshevist Government, that the statements of their prosecutor are without the slightest scintilla of foundation?

Mr. HENDERSON: Yes, I have seen some such statement in the Press and I will bring it to the notice of the Ambassador.

Major KINDERSLEY: Does the right hon. Gentleman realise that the lives of these men are at stake, and, seeing that we now have the great advantage of having a representative of the Soviet Government in this country, will he take advantage of that fact and make representations through the proper channels?

Mr. HENDERSON: I have just said so.

BRITISH DIPLOMATIC PRIVILEGES.

Sir F. HALL: 55.
asked the Secretary of State for Foreign Affairs what is the number of persons now in Russia attached to the British diplomatic and consular
services; and whether such persons are allowed full freedom to worship as they think fit or whether they are subject to the restrictions on religious worship imposed by the Soviet Government?

Mr. A. HENDERSON: There are at present 12 persons employed in His Majesty's Embassy and consular establishments in the Soviet Union. So far as I am aware, they are perfectly free to worship as they think fit.

CONSULAR PROPERTY.

Sir F. HALL: 56.
asked the Secretary of State for Foreign Affairs if he is aware that in 1918 Mr. Woodhouse, the consul in charge of the British Embassy at Petrograd, in order to obtain the necessary money to discharge his duties, arranged with Mr. C. H. Bucknall, a British subject and a dealer in precious stones in Petrograd, to place certain property at his disposal; if he will state approximately the value of the property so deposited; whether any receipt was given therefor; and if he will state whether the jewels so handed over for the purposes of His Majesty's service were either returned or their value paid over to Mr. Bucknall?

Mr. A. HENDERSON: I understand that the case to which the hon. and gallant Member refers, and which recently formed the subject of an action in the High Court, will be the subject of proceedings in the Court of Appeal. In the circumstances it would not be proper for me to make any statement.

Oral Answers to Questions — CHINA.

WEI-HAI-WEI (RENDITION).

Sir KINGSLEY WOOD: 29.
asked the Secretary of State for Foreign Affairs whether he can make a statement as to the rendition of Wei-hai-Wei to China?

Mr. MALONE: 37.
asked the Secretary of State for Foreign Affairs whether he will lay before the House the text of the agreement for the rendition of the Wei-hai-Wei territory which is stated to have been concluded with the Chinese Government?

Mr. A. HENDERSON: Negotiations for the rendition of Wei-hai-Wei were begun as a result of the offer to return
it to China made at the Washington Conference in 1922, and, after many interruptions owing to changes of government and to civil war in China, have now, I am glad to say, reached a definite conclusion. The general effect of two formal instruments signed at Nanking on 18th April last is that the territory shall be restored in full sovereignty to China on the 1st October next, the British garrison being withdrawn within one month of that date. The port of Wei-hai-Wei will be maintained as an area of international residence and trade, unless the Chinese Government decide to utilise it exclusively as a naval base, and the interests of Chinese and foreign holders of title deeds issued by the British administration have been fully safeguarded against all eventualities; and provision is made for the consultation of foreign residents in such municipal matters as may directly affect their welfare and interests. The Chinese Government will, moreover, loan to His Majesty's Government free of charge, for the use of His Majesty's Navy, certain buildings and other facilities for a period of 10 years, with the option of renewal by agreement between the two Governments.
The text of these agreements will be laid before the House when authentic copies have been received from His Majesty's Minister at Peking. I hope to be able to do this before the end of the month. Meanwhile, a full summary of the provisions of these instruments will be circulated in the OFFICIAL REPORT.

Sir K. WOOD: Does the latter part of the right hon. Gentleman's answer mean that our ships will be able to visit the harbour as heretofore in the summer months, and have full use of it?

Mr. HENDERSON: As far as I recollect, that is so, but, if the right hon. Gentleman desires definite information, I shall be glad if he will put a question down.

Sir ASSHETON POWNALL: Will the members of the families of the garrison in Hong Kong be able to use Wei-hai-Wei in the summer time for health reasons, as in the past?

Mr. HENDERSON: I think I must have notice of that question.

Lieut.-Colonel FREMANTLE: Has the right hon. Gentleman taken note of the fact that Chinese residents, farmers and local people, strongly hope that the British Government will retain possession of Wei-hai-Wei until more settled conditions obtain?

Colonel HOWARD-BURY: To which Government in China is it being handed over—the Northern or the Southern?

Following is the summary:

On 18th April, at Nanking, Sir Miles Lampson, K.C.M.G., C.B., M.V.O., and Dr. Cheng Ting Ti Wang, Minister for Foreign Affairs of the Republic of China, signed a convention for the restoration in full sovereignty to China of the territory of Wei-hai-Wei, leased to His Britannic Majesty under the Convention of 1st July, 1898. The Convention provides that the British garrisons stationed within the territory shall be withdrawn within one month of its entry into force, which shall take place on its ratification on 1st October, 1930. The transfer of administration and of public properties shall take place on the same day, and the existing administrative regulations, will, as far as possible, be maintained. All title deeds issued to Chinese owners by the British administration of Wei-hai-Wei, shall be recognised as being of the same validity as during the British administration. All title deeds issued to persons other than Chinese, shall be exchanged for Chinese deeds of perpetual lease and all leases issued by the British administration will be recognised. Should the Chinese Government decide to close the port of Wei-hai-Wei to foreign residents and trade with a view to utilising it exclusively as a naval base, the interests of the foreign property owners and lease-holders will be bought out at a fair compensation to be agreed upon between the Governments of China and the United Kingdom, who will appoint a joint commission for determining the amount of this compensation in each case.

Unless the National Government of China decide to close the port of Wei-hai-Wei with the above-mentioned object, they will maintain it as an area of international residence and trade and will lease to His Majesty's Government for a period of 30 years, with the option of renewal, certain lands and buildings for
the requirements of the British Consulate and public interests of the residents.

All decisions in British Courts pronounced before the rendition of the territory shall be considered to have the force of those pronounced by Chinese Courts.

Pending the general application of a system of local self-government in China, the Chinese Local Authorities will ascertain the views of foreign residents at Wei-hai-Wei, in such municipal matters as may directly affect their welfare and interests.

The two Plenipotentiaries also signed an agreement by which the Chinese Government will loan to His Majesty's Government, free of charge, as a sanatorium and summer resort for the use of His Majesty's Navy, a certain number of buildings and facilities on the island Liukungtao, in the Bay of Wei-hai-Wei, for a period of 10 years, with the option of renewal on the same terms by agreement, or on such other terms as may be agreed upon between the two Governments.

BOXER INDEMNITY.

Mr. MALONE: 42.
asked the Secretary of State for Foreign Affairs what is the position regarding the settlement of the Boxer indemnity question; and whether any agreement has yet been reached with the Chinese Government?

Mr. D. G. SOMERVILLE: 52.
asked the Secretary of State for Foreign Affairs whether the agreement with respect to the utilisation of the Boxer indemnity surplus has now been initialed by the Chinese and the British Governments; and whether he proposes to introduce legislation this Session to give effect to it?

Mr. A. HENDERSON: A draft agreement was initialed by His Majesty's Minister at Peking and the Chinese Minister for Foreign Affairs on 19th February. The text of the draft is now under consideration. I cannot yet say whether legislation on this subject will be introduced this Session.

MUNITIONS (EXPORTS, GREAT BRITAIN).

Mr. HARRIS: 49.
asked the Secretary of State for Foreign Affairs how far he is co-operating with the Chinese Government to prevent the export of arms, ammunition, and military material into China from this country?

Mr. A. HENDERSON: Arms, ammunition, and other military material specified in the Arms Export Prohibition Order, 1921, can only be exported from this country under the licence of His Majesty's Government, and no licence is granted for export to China, unless the British Consular officer at the proposed port of entry reports to me that the Chinese Government has issued a corresponding import permit.

Mr. THURTLE: Has my right hon. Friend any reason to believe that arms are being sent to China without a licence in this illicit fashion?

Mr. HENDERSON: No,

Oral Answers to Questions — FOREIGN OFFICE (RECRUITMENT).

Mr. THURTLE: 38.
asked the Secretary of State for Foreign Affairs if all recruitment for the Foreign Office staff is by means of competitive examination; and, if not, by what other means recruitment is effected?

Mr. A. HENDERSON: The answer to the first part of the question is in the affirmative. The second part of the question does not, therefore, arise.

Oral Answers to Questions — VATICAN (DIPLOMATIC REPRESENTATIVE).

Mr. THURTLE: 39.
asked the Secretary of State for Foreign Affairs the annual cost to the Exchequer of the maintenance of a diplomatic representative at the Vatican?

Mr. A. HENDERSON: The cost of the maintenance of a diplomatic representative at the Vatican, including the necessary accommodation and staff, is £5,880 per annum.

Colonel WEDGWOOD: Is it impossible for our representative at the Vatican to prevent interference with the Government of Malta?

HON. MEMBERS: Answer!

Mr. HENDERSON: It is no use hon. Members calling "Answer." These are very important questions, and they ought to be on the Order Paper.

Oral Answers to Questions — SAAR RAILWAY PROTECTION FORCE.

Mr. MANDER: 43.
asked the Secretary of State for Foreign Affairs whether the inter-Allied Saar Railway protective force, under the League of Nations, is now composed solely of French troops; and whether this will be evacuated on 30th June next at the same time as the withdrawal of the French troops from the occupied area?

Mr. A. HENDERSON: The Saar Railway Protection Force is at present composed of French and Belgian detachments. It is responsible to the Saar Governing Commission which is appointed by the League of Nations, and I have no information regarding its possible withdrawal.

Mr. MANDER: Will the right hon. Gentleman make inquiries at the forthcoming meeting of the Council of the League of Nations?

Mr. HENDERSON: I can make inquiries. The matter has not been raised during my term of office.

Oral Answers to Questions — DIPLOMATIC AND CONSULAR SERVICES.

Mr. MANDER: 44.
asked the Secretary of State for Foreign Affairs whether there is any difference in the examinations for entrance to the Diplomatic and Consular Services?

Mr. A. HENDERSON: The scheme of examination for the Diplomatic and Consular Services is the same as for the Administrative Class of the Home Civil Servants, but for candidates for the Diplomatic Service, Modern History and French and German are compulsory, while candidates for the Consular Service are required to take Economics and French. A high standard of qualification in French is necessary in both cases. The age limits for the Diplomatic Service are 22 to 25, and for the Consular Service 21 to 24.

Oral Answers to Questions — GERMAN REPARATIONS.

Mr. WISE: 45.
asked the Prime Minister if the Hague agreement on German Reparations has yet been ratified by the requisite number of countries to bring it into force; whether Great Britain has
yet ratified the Hague agreements; and whether these agreements will be submitted for discussion by the House of Commons before ratification?

Mr. MALONE: 46.
asked the Prime Minister when His Majesty's Government intend to ratify the agreements reached at the recent Hague Conferences; and whether any Parliamentary measures will be brought before the House of Commons?

The PRIME MINISTER (Mr. Ramsay MacDonald): The reply to the first two parts of the question put by my hon. Friend the Member for Leicester East (Mr. Wise) is in the negative. The agreements were laid on the Table of the House on 11th February and, no objection having been raised, His Majesty's Government in the United Kingdom will deposit their ratification within a very few days.

Oral Answers to Questions — NATIONAL HOLIDAYS.

Mr. MILLS: 47.
asked the Prime Minister whether, in view of the continued protests of British employers against the continuance of certain holidays which vary in date each year and because of the continued appeal of British organisations of workers that 1st May be substituted as one of the alternative holidays of a fixed date, he will consider this fixation of a national holiday at the earliest moment possible?

The PRIME MINISTER: It would be impracticable to make the Easter or Wrhitsun holidays, which are the only movable holidays, coincide with the 1st May, and a proposal to abolish Easter Monday or Whit Monday as a Bank Holiday and substitute the 1st May, would not, it is thought, commend itself to public opinion.

Mr. MILLS: Is the Prime Minister aware that practically every Chamber of Trade and Commerce in the country is fed up with this continued interference with business at irregular periods, and that the fixation of a static day would give satisfaction to all classes of the community?

Sir F. HALL: Are you speaking for yourself?

Mr. MILLS: Not for you.

The PRIME MINISTER: There is such a thing as a permanent calendar, and think that during the rest of our lifetime we can mark in our diaries exactly when Easter and Whitsuntide will be.

Oral Answers to Questions — LONDON NAVAL TREATY.

Sir NICHOLAS GRATTANDOYLE: 48.
asked the Prime Minister whether legislation will be required to carry out any provisions of the London Naval Treaty; and, if so, whether he can state the date of the introduction of the Measure?

The PRIME MINISTER: Legislation arising out of the London Naval Agreement will be necessary, but I am not yet in a position to give any definite information as to time.

Oral Answers to Questions — STRAITS COMMISSION.

Sir N. GRATTAN-DOYLE: 54.
asked the Secretary of State for Foreign Affairs the names of the British representatives on the Straits Commission, their emoluments as commissioners, the situation of the administrative offices of the commission, and the occasions on which it met during the years 1929 and 1930?

Mr. A. HENDERSON: There is only one British representative on the Straits Commission, Captain Malcolm MacDonald, R.N. His salary and emoluments amount to a sum of £1,422 a year. The Report of the Commission for 1929, a copy of which I am sending to the hon. Member, shows that the meetings were held throughout that year at Constantinople. I have no information as to the exact number of meetings.

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS.

WIDOWS AND CHILDREN.

Captain CAZALET: 57.
asked the Minister of Pensions whether he has received any representations as to the desirability of altering the Pensions Act so that widows and young children of all ex-officer and other ranks, who die of war injuries, should be thereby covered; and, if so, whether he proposes to take any action in that direction?

The MINISTER of PENSIONS (Mr. F. O. Roberts): I have received one or two representations on this point. With regard to the last part of the question, I would refer the hon. and gallant Member to the answer which I gave to the hon. Member for Windsor (Mr. A. Somerville) on the 17th ultimo, of which I am sending him a copy.

Captain CAZALET: 58.
asked the Minister of Pensions how many pensioned ex-officers and other ranks have died of war injuries since the Pensions Act, 1921, was passed; how many of them had married after being wounded or otherwise injured in war and so left widows and/or children not provided for by that Act; how many such widows and children are there now; and what would be the annual cost of applying to them the provisions of the Pensions Act for wives married and children born within the periods therein laid down?

Mr. ROBERTS: I have no record of the aggregate number of deaths that have been caused by war disabilities, as no occasion arises to determine officially the cause of death unless a claim is made by a pensionable survivor. Nor have I any precise information as to the number of officers and men married or of children born to them since the receipt of the war disability, the position as regards pension of the dependants in such cases being determined by the Royal Warrants of 1914 and onwards, and not by the War Pensions Act, 1921. On an approximate estimate, however, based on all the data available, the cost of placing the wives and children of all ex-service officers and men in the same position under Royal Warrants, regardless of the date of marriage or of birth, would be about £7,750,000 rising to £9,250,000 a year.

SEVEN YEARS' LIMIT.

Major COHEN: 59.
asked the Minister of Pensions whether he will inform the House of the number of claims submitted outside the seven years' time limit which have been referred to the medical experts for advice; the result of the advice given in each case, and whether such advice has been acted upon by him?

Mr. ROBERTS: Up to date about 30 cases of material doubt or difficulty have been or are being referred to the in-
dependent medical consultants for consideration and advice. Of these, 15 have so far been considered, with results unfavourable to the claim in 14 cases and favourable in one.

Major COHEN: 60.
asked the Minister of Pensions the number of claims for pension that have been submitted by officers and men outside the statutory time limit of seven years; the number of such claims that have been conceded; the number that have been definitely rejected; and the number of claims that have been submitted under this heading since November, 1929, and the number admitted?

Mr. ROBERTS: I have no record of the total number of applications which have at any time been submitted, but the number of such applications which have been admitted by the Ministry, either by way of pension or treatment, during the eight and a half years up to 30th April last since the time limit became operative, is between 1,000 and 1,100. In the period since November last, some 11,400 fresh applications have been received, and 318 have been accepted for compensation by way of treatment or pension. It will be understood that all the applications have not as yet been dealt with.

NEED PENSION (MRS. L. WICKS).

Commander SOUTHBY: 62.
asked the Minister of Pensions whether he will reconsider the case of Mrs. L. Wicks, of 17, Lincoln Road, Worcester Park, who was paid a need pension of 8s. per week in respect of her son killed in the War, which pension was reduced to 5s. a week from the 5th December, 1929, on the ground that Mrs. Wicks was in receipt of an old age pension of 10s. per week from that date and was also earning 10s. a week, observing, firstly, that the money earned is derived from precarious employment, secondly, the age of this widow, and thirdly, that she has already been penalised regarding her old age pension on technical grounds, since she was really entitled to it on the 5th December, 1928, but through ignorance omitted to make application for it within the statutory period and therefore did not begin to receive her pension until 5th December, 1929?

Mr. ROBERTS: Pensions based on need are required to be determined with
regard to the actual means of the pensioner, and I should have no authority to treat income derived from old age or other pensions differently from means derived from other sources. It is not, therefore, possible to increase the War pension now in payment to Mrs. Wicks, whose total income is, as the hon. and gallant. Member will be aware, in fact higher now than it was before.

Oral Answers to Questions — TRADE AND COMMERCE.

OVERSEAS TRADE DEVELOPMENT COUNCIL.

Mr. ALBERY: 64.
asked the Secretary to the Overseas Trade Department what further names have been added to the panel of representatives who are to assist the Overseas Trade Development Council; and whether this council has yet started to function?

Mr. GILLETT (Secretary, Overseas Trade Department): No further names have so far been added to the panel of the Overseas Trade Development Council, but I am pleased to be able to state that Sir Arthur Balfour and Sir William Larke, who were formerly members of the panel have consented to join the standing council. The answer to the second part of the question is in the affirmative.

Russia.

Mr. ALBERY: 65.
asked the Secretary to the Overseas Trade Department if he can give any comparative figures concerning American and English trade with the Soviet of Russia during the last six months.

Mr. GILLETT: During the six months ended February last, the values of the imports into the United Kingdom and the United States consigned from the Soviet Union (Russia) were approximately £14,884,000 and £2,148,000, respectively, and the values of the exports (including re-exports) to the Soviet Union (Russia) from the United Kingdom and the United States were approximately £3,983,000 and £13,680,000, respectively. This is the latest period for which figures for the United States are available.

Sir W. DAVISON: Do not these figures conclusively show that there was no need for any special trade agreement, in view of the fact that United States im-
ports are less and their exports are greater than those of this country without a trade agreement?

Mr. GILLETT: I am afraid that I do not follow the argument of the hon. Gentleman.

PALESTINE.

Colonel HOWARD-BURY: 66.
asked the Secretary to the Overseas Trade Department whether he can give the figures for the year ended 31st March, 1930, of the exports from this country to Palestine and the imports to this country from Palestine?

Mr. GILLETT: The declared value of merchandise exported from Great Britain and Northern Ireland registered as consigned to Palestine during the 12 months ended 31st March, 1930, amounted to £1,038,000, including exports of imported merchandise valued at £26,000. During the same period the declared value of merchandise imported into Great Britain and Northern Ireland and registered as consigned from Palestine amounted to £1,282,000.

Colonel HOWARD-BURY: In view of the development of the country, will the hon. Member make representations and see that when any orders are given they are sometimes given to this country, especially for machinery for the power station, instead of orders being given, as is nearly always the case, to Germany?

Mr. GILLETT: I should be glad to do anything on those lines. Possibly the hon. and gallant Member is aware that our exports went up £300,000 compared with the previous 12 months, on the figures that I have already given.

ANGLO-DANISH TRADE.

Mr. A. M. SAMUEL: 68.
asked the Secretary to the Overseas Trade Department whether his efforts to increase Anglo-Danish trade have met with any success; and what steps he has already taken about this trade and with whom?

Mr. GILLETT: With regard to the first part of the question, I fear it is too early to return a definite answer in the affirmative. The answer to the second part is that my Department has been in communication with the Association of British Chambers of Commerce, Federation of British Industries, and the
National Union of Manufactures. His Majesty's Minister at Copenhagen has also been in communication with various Danish bodies.

Mr. SAMUEL: Is not this a matter in which the Minister might take a vigorous initiative and get for us some considerable amount of trade as a result of his own efforts?

Mr. GILLETT: I have already done something, but upon the information that I have before me at the present time I do not consider that I can do more at the present moment.

LOCOMOTIVE BOILERS, INDIA.

Mr. A. M. SAMUEL: 69.
asked the Secretary to the Overseas Trade Department if he will ascertain and state the reasons why British locomotive makers recently quoted to the Indian stores department prices 20 per cent. higher than those quoted by Hungarian and Berlin makers, with the result that Indian orders for 132 boilers and 66 cylinders were secured by Hungarian and Berlin firms?

Mr. GILLETT: My attention has been directed to the case referred to. The detailed information before me is confidential, and I do not consider that any useful purpose would be served by pursuing the investigation further.

Mr. SAMUEL: Is not the Minister aware that time after time we are losing these orders and has not the occasion arisen when an analysis of the causes of our losing these orders might be made, so that we might consider how we could get over the price difficulty which seems to stand in the way of our getting the orders?

Mr. GILLETT: My answer only refers to this one question. In regard to the general problem, I am in negotiation with the trade concerned not only in this country but in other countries.

Mr. SAMUEL: Is the hon. Member trying to get an analysis of the causes, so that we may discover where the difficulty and weakness lie?

Mr. GILLETT: I am trying to find out the difficulty as far as I possibly can.

HERRINGS.

Viscount ELMLEY: 71.
asked the Minister of Agriculture what steps are being taken to provide new markets abroad for British herrings?

The MINISTER of AGRICULTURE (Mr. Noel Buxton): The question of finding new markets abroad for British herrings is one of the subjects which is being considered by the Economic Advisory Council's Committee on the Fishery Industry, which is taking evidence on the subject.

Oral Answers to Questions — AGRICULTURE.

GERMAN CEREALS.

Mr. ALBERY: 72.
asked the Minister of Agriculture in view of the largely increased dumping of German cereals in this country since the imposition in Germany of an import duty on cereals, coupled with an export credit, whether he has studied the effect of this German legislation on agriculture in this country; and if he proposes to take any steps to protect British agriculturists?

Mr. N. BUXTON: I would remind the hon. Member that the system of Import Bonds in Germany has been in force, with the exception of a short period during the War, since 1894. As stated by my right hon. Friend, the Parliamentary Secretary, in reply to a similar question by the hon. Baronet, the Member for Grantham (Sir V. Warrender), on 17th April, the Government are fully aware of all the facts and circumstances connected with this system, and have done and will continue to do whatever is practicable in the matter.

Mr. ALBERY: Is the right hon. Gentleman aware that during the last three years, owing to certain alterations made in German legislation, the exports into this country have gone up year by year and the imports into Germany have gone down year by year?

Mr. BUXTON: On the contrary, the fact is that last year the imports of wheat into this country were very much smaller.

Major MACKENZIE WOOD: Can the right hon. Gentleman say what answer was given by the Economic Committee of
the League of Nations to the representations which the Government recently made to them?

Mr. BUXTON: The subject was laid before the German representatives and we are awaiting a reply when the question has been studied at Berlin.

Mr. MACPHERSON: Is it not a fact that in 1924 some 77,000 cwts. of German cereals came into this country while last year 2,500,000 cwts. were imported into this country?

Mr. BUXTON: The import of oats has increased while that of wheat has decreased. It is very difficult to trace the connection between the quantity of imports to this country and the prices prevalent.

Mr. MACPHERSON: Is it not a fact that there is a subsidy on each cwt. of oats dumped into Scotland from Germany?

HORSES (EXPORT).

Mr. MATTERS: 75.
asked the Minister of Agriculture if he can now assure the House that the export of horses from the United Kingdom to the Continent for slaughter there has entirely ceased?

Mr. N. BUXTON: There is no statutory prohibition of the exportation of horses to the Continent for the purpose of slaughter. I would remind my hon. Friend that full particulars as to the extent and nature of this trade have been given in recent answers to questions.

Mr. FREEMAN: Can the right hon. Gentleman assure us that the animals sent are killed by the humane slaughterers?

Mr. BUXTON: That has been the case in recent times. In Holland humane slaughter is compulsory. All the British horses which have gone to Paris have been shot.

GOVERNMENT POLICY.

Mr. WILLIAM TAYLOR: 76.
asked the Minister of Agriculture when the White Paper relating to the agricultural policy of His Majesty's Government may be available for the information of the House?

Mr. N. BUXTON: I would refer my hon. Friend to the reply given to a
similar question by the hon. Member for Stone (Sir J. Lamb) on 1st May, to which there is at present nothing to add.

Mr. W. TAYLOR: Is the right hon. Gentleman aware of the grave situation in those counties where arable agriculture operates, and the necessity for an early announcement of policy?

Mr. BUXTON: Proposals are being studied, and an announcement will be made in due course.

Sir ARTHUR STEEL-MAITLAND: Is the right hon. Gentleman aware that men are being dismissed continually in agricultural districts because of the uncertainty in which the farmers are placed at the present time with regard to what may be the policy of the Government in future? If the right hon. Gentleman wishes, I can furnish him with definite cases. Can he not, therefore, give us some date on which we may expect a statement of policy?

Mr. BUXTON: I would remind the right hon. Gentleman that a very much longer time elapsed during the late Government's term of office.

Mr. MACPHERSON: Is the right hon. Gentleman making any attempt to secure a joint conference between the three parties in connection with this matter?

Mr. BUXTON: It was thought more profitable to hold a conference of the three parties in the industry.

Mr. MACPHERSON: Should there not be also a, conference of the three political parties, along with the representatives of the industry?

Mr. BUXTON: I doubt very much whether it would be profitable.

Mr. ALPASS: Is it not a fact that attempts were made to hold a joint party conference, and that the representatives of the Conservative party left the meeting and would not take part?

Captain BALFOUR: In view of the terribly depressed state of the agricultural industry, and the fact that we have had only nine hours' Debate on agriculture since the present Government came into office, cannot the right hon. Gentleman give us a, definite undertaking when we shall be able to discuss the subject?

Mr. BUXTON: I hope that the Ministry of Agriculture Vote will be put down at the earliest possible moment.

The following question stood on the Order Paper in the mane of Viscount WOLMER:
*81. "To ask the Minister for Agriculture if he can state when he proposes to make a statement on the agricultural policy of the Government?

Mr. N. BUXTON: That question has already been answered. [HON. MEMBERS: "No!"]

CROWN PROPERTY, REGENT STREET.

Mr. DAY: 77.
asked the Minister of Agriculture the gross yearly rentals received for the Crown property let on public lease in Regent Street; and whether the whole of this property has been put up and let by public tender, or whether arrangements have been made to let any of it by private treaty?

Mr. N. BUXTON: The total rental of the Crown property in Regent Street for the year to 5th January last was about £492,000. On the rebuilding of premises there, building agreements were usually entered into with occupying tenants of shops. Where this for any reason was not feasible the sites were, in most cases, offered to public tender; but where satisfactory tenders were not forthcoming, and in a few other cases where the circumstances were exceptional, lettings were effected by private treaty.

FOREIGN EGGS (MARKING).

Mr. DAY: 78.
asked the Minister of Agriculture whether his attention, has been called to the fact that foreign cold-stored eggs are being sold in Great Britain marked new laid; and whether, as he has no powers under the Agricultural Produce (Grading and Marking) Act to take action in such cases, he will consider introducing amending legislation which will have as its object the protection of the public when purchasing these eggs from being under the impression that they are new laid?

Mr. N. BUXTON: I have no doubt that in the late autumn and winter, imported eggs that have been cold stored abroad are bought under the impression that they are fresh, although they are, of course, marked as imported, but it is impossible to devise enforceable legislation to protect the public from this state of affairs which, however, from the standpoint of the home producer, has the ad-
vantage that, in the long run, it will react favourably on the reputation of the home product.

Mr. DAY: Is the right hon. Gentleman aware that some of these eggs are marked "New laid"?

Mr. BUXTON: I am aware of that, but they are also marked "Imported."

FARM MANAGEMENT SURVEY.

Viscount WOLMER: 79.
asked the Minister of Agriculture whether instructions for the projected national survey have yet been drawn up; whether it is intended to publish them; whether the Reports of the various regional investigations will be published as received or whether it is intended to publish a national Report; and, if so, whether he can state by whom this latter document is to be drawn up?

Mr. N. BUXTON: The details of the proposed farm management survey have not yet been settled, and it is therefore too early to say exactly the way in which the results will be issued. I may explain, however, that it is intended that reports emboding the results should be drawn up and published by the universities and agricultural colleges concerned.

CONFERENCE.

Viscount WOLMER: 80.
asked the Minister for Agriculture when the Agricultural Conference last met and when it is going to meet again?

Mr. N. BUXTON: I would refer the Noble Lord to the reply given to a similar question on 14th April, to which there is at present nothing to add.

Viscount WOLMER: Is it not a fact that this Conference adjourned more than a month ago because the Government had no policy?

Mr. BUXTON: The Conference adjourned to await the results of certain technical examinations, and, having consulted several members of the Conference, I find that the wish is to defer meeting until those examinations are complete.

Viscount WOLMER: Why did not the right hon. Gentleman make those examinations of policy before he made his election pledges?

ALLOTMENTS.

Mr. SAWYER: 83.
asked the Minister of Agriculture, with reference to the 5,784 acres of land hired for allotment purposes during the years 1925 to 1928 by local authorities at an aggregate rental of £15,144, on what terms such land has been hired; whether on lease and for how many years or whether the letting is merely from year to year; and whether conditions are attached whereby the owners may resume possession by notice or otherwise when it appears that the land could more profitably be used for building purposes?

Mr. N. BUXTON: As a rule, the tenancy of land held by local authorities for allotments is for a comparatively short term of years. In appropriate cases there is a power of re-entry by the owner for building or industrial purposes, on giving not less than three months' notice.

EDUCATION (SCHEMES).

Mr. EDE: 86.
asked the Minister of Agriculture how many county councils have presented schemes for the extension of agricultural education in their county; and how many such schemes have been approved, how many amended, and how many disapproved by him?

Mr. N. BUXTON: Forty-three county councils have presented schemes for an extension of agricultural education in 1930–31 and these are now under consideration in the Ministry in connection with the current year's estimates. No scheme has so far been either approved or disapproved finally and in detail, although approval in principle has been intimated in one or two cases, and particular items in some schemes have been given early and special approval to permit of their immediate introduction.

Mr. ALPASS: Before approving of any of these schemes, will the right hon. Gentleman carefully consider whether the facilities to be extended shall not include within their scope bona fide agricultural labourers?

Mr. BUXTON: Yes, Sir.

Oral Answers to Questions — FISHING INDUSTRY (SEALS).

Sir ROBERT HAMILTON: 82.
asked the Minister of Agriculture whether it
is intended to discontinue the payment of monetary rewards for the destruction of seals in the Wash?

Mr. N. BUXTON: Yes, Sir. The payment of these awards was authorised for a limited period to enable the Ministry to procure information as to whether the destruction of the common seal was beneficial to fisheries. The Ministry's investigations have produced no evidence to show that the common seal causes any material damage to fisheries in the Wash, and I do not consider that the expenditure of further public money on the payment of awards would be justified.

Sir R. HAMILTON: Is not this decision entirely contrary to the views of the Eastern Sea Fisheries Joint Committee, whose business it is to look after this matter, and who have come to the conclusion that the seals do a great deal of damage to the fish; and is it the considered opinion of the Ministry that seals do not eat fish?

Mr. BUXTON: My information is to the contrary effect. Elaborate investigations have been carried out during the last four years, and the evidence is in the opposite direction from that indicated by the hon. Member.

Sir R. HAMILTON: Is it the case that the investigations carried out by the Ministry were on a very small scale, and showed that the seals, the bodies of which were opened had eaten other things besides fish, but there was nothing to show that they did not eat fish?

Mr. A. M. SAMUEL: Is it not the case that on part of the coast of North Norfolk these great seals harry the fish, frighten away shoals of herring, and break the fishermen's nets?

Mr. BUXTON: That was my impression a short time ago, but the evidence has disproved it.

Commander SOUTHBY: May I ask if these investigations have also cleared the character of the grey seal?

Mr. BUXTON: I am not referring to the grey seal.

Captain GUNSTON: Can the right hon. Gentleman state the exact date on which it is proposed to take the Second Reading of the Grey Seals Protection Bill?

Mr. BUXTON: Perhaps the hon. and gallant Member will put down a question.

Oral Answers to Questions — EPSOM DOWNS (REGULATION).

Mr. EDE: 84.
asked the Minister of Agriculture if he has had any intimation from the Epsom Grand Stand Association, Limited, or any other party, expressing willingness or desire to prepare a scheme for the regulation of the Metropolitan common known as Epsom Downs?

Mr. N. BUXTON: An intimation has been received by my Department from the Epsom Urban District Council of their desire to present a memorial with a view to the Ministry making a scheme for the regulation of Epsom Downs, and the Ministry has supplied the council with the necessary information as to procedure. I understand that the council have been in communication with the Epsom Grand Stand Association with a view to the submission of an agreed memorial.

Commander SOUTHBY: Is it not the case that the Epsom Grand Stand Association are in agreement with the urban council on this matter?

Mr. BUXTON: Yes, Sir. But no memorial has yet been received by me.

Mr. EDE: 85.
asked the Minister of Agriculture if his consent has been sought this year to the erection of any new structures or the placing of any new obstructions impeding the use of the Metropolitan common known as Epsom Downs for the purpose of air and exercise by pedestrians?

Mr. BUXTON: No, Sir.

BUSINESS OF THE HOUSE.

Mr. STANLEY BALDWIN: May I ask the Prime Minister what the business will be on Wednesday? I should be glad also to know how far it is proposed to proceed to-day? I put my question in two parts.

The PRIME MINISTER: On Wednesday, the Home Office Vote has been put down for consideration in Committee of Supply. Regarding the business to-day, the first three Orders on the Paper were
announced to be taken to-day, that is the Railways (Valuation for Rating) Bill, and then the Money Resolution dealing with Air Transport (Subsidy Agreements), and the Overseas Trade Bill, Second Reading. We should like very much, if possible, to get the Board of Education Scheme (Devon, Crediton, Exhibition Foundation) Confirmation Bill, Second Reading, which I understand is non-contentious; and we are very anxious to get the Invergordon Water Supply Bill before a Select Committee of the House. After the Second Reading of that Bill, we shall move that it be committed to a Select Committee. We should like to get those items. We propose to go no further to-day.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE B.

Mr. FREDERICK HALL reported from the Committee of Selection; That they had discharged the following Member from Standing Committee B: Miss Lee; and had appointed in substitution: Mr. Gordon Macdonald.

SCOTTISH STANDING COMMITTEE.

Mr. FREDERICK HALL further reported from the Committee; That they had discharged the following Member from the Standing Committee on Scottish Bills (added in respect of the Housing (Scotland) Bill): Major Glyn; and had appointed in substitution: Lord Colum Crichton-Stuart.

Reports to lie upon the Table.

Orders of the Day — RAILWAYS (VALUATION FOR RATING) BILL

Not amended (in the Standing Committee) considered.

Orders of the Day — CLAUSE 12.—(Valuation lists to conform to railway valuation roll.)

Captain GUNSTON: I beg to move, in page 20, line 39, after the word "or," to insert the words "on or from any rating area in the Metropolitan Police District."
I have another Amendment which is more or less consequential on this proposal—in the same line of the Clause to leave out the words "the Metropolitan Police" and insert the word "that." This is a somewhat technical Amendment, but it seeks to carry out what, I think, is the obvious intention of the Government in this Clause. The Clause provides that where an assessment committee makes any amendment of a valuation list, they shall make any necessary amendment in the totals of values shown in that list, and in the case of a rating area in London it is provided that:
where any such amendment in a total of values affects the amount of any sum already assessed on or any contribution already required from that area, by the London County Council, or by the Receiver for the Metropolitan Police District, the difference shall be paid, or as the case may be, repaid or allowed.
We are rather nervous that those words might not apply to the whole of the Metropolitan Police area because the words "that area" might be taken as applying only to the London County Council area. The Metropolitan Police area contains many extra-London areas not in the London County Council area, and the object of the Amendment is to make it quite clear that the provision covers the whole area. We are rather nervous that in the event of assessments being reduced, it might not be made good over the whole area, and that therefore extra-London areas would have to make good the deficiency. Of course it may be argued that in the event of assessments being reduced outside the London County Council area, but inside the Metropolitan Police area, that would have to be made good by the London County Council, and
so what you would lose upon the swings you would get back on the roundabouts. I believe that argument is fortified by the belief that the receiver for the Metropolitan Police district has wider powers in the Metropolitan Police area than inside the London County Council area. This is more or less a drafting Amendment, and I move it in the hope of clarifying the Bill and putting into it what the Government really intend. I hope the Government will accept the Amendment.

Sir ASSHETON POWNALL: I beg to second the Amendment.

The MINISTER OF HEALTH (Mr. Arthur Greenwood): This Amendment and the consequential Amendment on the Order Paper—in line 39, to leave out the words "the Metropolitan Police," and to insert instead thereof the word "that"—were put down on the Committee stage of the Bill, I understand, at the instance of the Association of Municipal Corporations, which had been moved to take this action by one of the areas in London, the Acton Borough Council, which, as hon. Members know, is in the Metropolitan Police area. Since the time when the Amendment was first submitted, the Receiver of the Metropolitan Police has circulated a statement showing what he proposes to do in the way of setting out a basis for the allocation of police charges in the future. When that circular was issued, a representative of the Receiver and a representative of the Association of Municipal Corporations, in the person of the Borough Treasurer of Acton, considered the question, and Acton, which is the only local authority that raised the question, is now quite satisfied and does not wish to proceed with the Amendment, and I understand that the Association of Municipal Corporations see no necessity for going any further with it. The Bill is a highly technical Bill, and having regard to the fact that the people who inspired the Amendment originally are perfectly satisfied now, I hope it will not be pressed.

Sir KINGSLEY WOOD: Had the right hon. Gentleman not better give a short explanation to the House of the point raised by my hon. and gallant Friend? It is not sufficient, when a matter is raised in this House, to say that certain
people who originally brought it up are satisfied, and I think it is due to the House that we should have a short explanation of the position from the Minister.

Mr. GREENWOOD: If the right hon. Gentleman wants the information, I will give it. Hon. Members who have followed this Bill will know that the Clause now under discussion, Clause 12, deals with the machinery for bringing the local valuation lists into accord with the railway valuation roll, and the Subsection to which the Amendment refers deals with the effect on the totals of rateable value in rating areas. The totals of rateable value are the basis on which the precepts in respect of the common charges of the London County Council, so far as the London county area is concerned, and the Metropolitan Police, so far as the Metropolitan Police area is concerned, are issued. Under an Act of 1869, the Valuation (Metropolis) Act, alterations in the value of the hereditaments and the addition of any new hereditaments inside the county do not affect the total for precept purposes until the year after that in which they take place. Outside the London County Council area, but within the Metropolitan Police area, there is no similar statutory provision governing the effect of alterations and additions, and consequently there is at present a difference in regard to the basis of contribution to Metropolitan Police precepts between the authorities inside and those outside the London County Council area. That difference, which may be unfortunate, though not likely to give rise to serious difficulties, will only be removed by an amendment of the general rating law applicable to London, because it will affect all kinds of hereditaments, and it would not be possible, clearly, in a Bill which relates only to railway hereditaments, to undertake a general amendment of the rating law for the London area.
The Amendment now under discussion was designed to secure, in what was thought to be the interest of the extra-Metropolitan areas outside the County Council area, that the inside authorities and the outside authorities should be put in the same position as regards the effect of inter-quinquennial alterations of the valuation of railway property. But apart from the fact that any such altera-
tions are, as the local authorities are prepared to recognise, relatively to the total rateable value likely to be quite insignificant, I suggest that there is no case for assimilating the provisions applicable inside and outside the County of London area in the case of one particular class of hereditaments, while leaving the provisions relating to far more numerous and far more important alterations in the value of other properties unassimilated.
4.0 p.m.
The effect of Sub-section (4) of the Clause as it stands in the Bill is to preserve the general London law for London's railway hereditaments, except that certain alterations in value will have a retrospective effect on totals for precepting purposes as from April of the year in which they are made, because, under a previous Clause of the Bill, they are to have a similar retrospective effect for the purpose of determining the railway companies' liability to the Rating Authority. It may be admitted that this would be advantageous rather than the reverse to the outside authorities, because it is likely that the balance of alteration of value of railway hereditaments will, on the whole, trend upwards, including, of course, the addition of new railway hereditaments. Inside the county these increases, these additions, will be taken into account for precept purposes a year earlier than they would otherwise have been. The basis adopted by the Receiver of the Metropolitan Police area for his future precepts would appear—it may be that this has influenced the local authorities concerned—to be distinctly favourable to the outside authorities. The practice which he is laying down will go a very long way towards removing any grievance which might have arisen in the past owing to differences, in the larger Metropolitan Police area, between the London County Council authority and those on the fringe that are outside the London County Council area. The general effect of the Receiver's arrangements is that, as regards all classes of hereditaments, railway and otherwise, increases of value which outside the London County Council area operate retrospectively to 1st April for the purpose of determining the liability of the individual ratepayer to his rating authority, shall be disregarded for the purpose of computing the totals unless
a refund is applied for; that is to say, unless on balance the decreases outweigh the increases, in which case a balance must be struck.
I am sure that, complicated though the arrangements are, different as they may be between the London County Council and the larger area, it would not be possible, in a limited Bill of this kind, which deals with only one kind of hereditament, to make any general and comprehensive alteration in the law, and as the extra-Metropolitan areas within the Metropolitan Police district are satisfied that their interests are not being sacrificed, I hope that the House will agree to allow the Clause to go through without the Amendment being pressed.

Captain CROOKSHANK: It is admittedly a very complicated and technical matter, but I think that the Minister's reply has raised two points which the House might consider. First of all the right hon. Gentleman said that the Amendment was originally recommended by a certain Association, that since then the Receiver had discussed with them a circular in which was outlined what he proposed to do, and that as a result of the basis on which that circular was drawn, they did not wish to press their objection. That may or may not be a good thing, but it is hardly sufficient argument in this House to say that a party saw the Receiver and liked his proposals, and that therefore it was not necessary for the House to clarify the law. Surely our job is to make the law perfectly watertight and clear? There will not always be the same Receiver or the same people on the local authorities, and the basis might conceivably change unless we make the Bill perfectly clear.
Then the Minister said that the new basis which the Receiver had discussed with these authorities was distinctly favourable to the outside authorities, and that that, perhaps, was why they had withdrawn such opposition as they had shown earlier. In fact, from his speech one would gather that the whole future policy on this question depended entirely on the attitude of the Receiver for the time being. If that is so it is surely administrative law with a vengeance. First of all we are not to make an Amendment if we think fit, because the authorities have compromised with the Receiver on
his policy, and then because the Receiver's policy is apparently more favourable to them than they had anticipated we are to have no more say in the matter at all. I think that that is a fair statement of the case that has been put. If it is correct, other things being equal, it seems to me perfectly clear that we ought to put some words into the Clause to make sure that that does not happen.
After all, this is legislation and not the outside agreement of various authorities. Everyone recognises that in this Bill the Ministry has to come to some arrangement, preferably a friendly arrangement, with the people most concerned, but I do not think that that absolves this House from its clear duty of putting into an Act of Parliament exactly what it means, and, if necessary, putting into so many words the agreements which are reached. There is no objection to agreements being reached by the Ministry and the local authorities, but when they are reached I do not see why we should not put the basis of them into a Bill. The right hon. Gentleman said that there was no sense in carrying out, in this comparatively small matter, some sort of assimilation, when far greater matters were not being assimilated. But if assimilation is a good thing we had better start with the smaller matters first, and the bigger ones can come along afterwards after we had had some experience of the advantages or the contrary of the assimilation between inside and outside authorities. The object of the Amendment was to try to put all authorities on the same basis. For the life of me I cannot see anything in what the right hon. Gentleman has said which does not make it necessary that we should deal with everyone on the same equal and fair basis. If they have come to some outside agreement let us put it into the Bill so that it may be enforceable, and we shall not have to depend on the perfectly genuine desire of a Receiver to do what is fair and proper and to get a compromise.

Sir K. WOOD: The House will agree that my hon. and gallant Friend who moved the Amendment has raised a substantial point. I do not think that anyone wants to hold up the Bill, because it has been the subject of consideration between the Ministry of Health and the authorities interested for a considerable time. I remember that when I was at
the Ministry we were desirous of coming to some proper and reasonable arrangement. Now that some conclusion has been reached I am sure that no one would desire in any way to disturb it. Most of those who listened to the right hon. Gentleman's explanation will agree that he raised matters which certainly require consideration from the House. I remember very well the right hon. Gentleman complaining about the difficulties of Bills introduced by the Ministry of Health during the last Government. He used to say how difficult it was to understand what was put forward, especially certain formulas. Anyone who listened to his speech this afternoon must have come to the conclusion that he has not been backward in so far as the introduction of matters of difficulty and complexity are concerned. We can congratulate the right hon. Gentleman on having produced a Bill which it is somewhat difficult even for him, I shall not say to understand, but to explain.
This matter has been raised by an important association of local authorities, and it affects an important district of London. I am glad to hear that the particular district concerned is satisfied with the explanation that the right hon. Gentleman has given. Certainly it was a very curious explanation. The right hon. Gentleman relied a great deal, first, on the fact that if we were going to make an alteration of this kind it would involve a general alteration of the law altogether, and that, therefore, the minor alteration must not now be made. I cannot assent to that view. If the right hon. Gentleman had said, "Well, in the present circumstances and in order to get this Measure through, do not let us raise any difficulty with regard to the Measure on this particular point," I could understand the proposal, but I cannot accept the argument that because a general alteration of the law ought to be made we should not attempt to make some minor alteration. Secondly, I was rather surprised at the right hon. Gentleman's argument that this alteration would bring certain advantages to areas outside London. That provoked the question, Who is going to suffer on account of these advantages being given to areas in outer London? The right hon. Gentleman openly stated that there would be some advantage to particular
areas. If that is the case some other areas and local authorities must suffer.
I suggest to my hon. and gallant Friend that, while not accepting the arguments advanced by the Minister, he should not press the Amendment. Most of us are anxious that the Bill should find its way to the Statute Book. It is true that there is a substantial point which my hon. and gallant Friend has put forward, and the House is indebted to him for having done so, but I urge him not to press the Amendment, in the general interest of the Bill. It is not a party Bill in any sense. A great deal of work in connection with it was done by the last Government. Personally I am very glad that an arrangement has at last been concluded.

Amendment negatived.

Bill read the Third time, and passed.

AIR TRANSPORT (SUBSIDY AGREEMENTS) [MONEY].

Considered in Committee under Standing Order No. 71A.

[Mr. ROBERT YOUNG in the Chair.]

Motion made, and Question proposed,
That it is expedient to authorise the President of the Air Council to agree, with the approval of the Treasury, to pay subsidies to any persons and to furnish facilities for their aircraft, in consideration of those persons maintaining in accordance with the agreement a regular service for the carriage by air of passengers, goods, and mails, and to authorise the payment out of moneys to be provided by Parliament of any sums required by the President for the fulfilment of any such agreement:
Provided that the aggregate amount of the subsidies payable under all such agreements shall not exceed one million pounds in any financial year, and no subsidy shall be payable under any such agreement after the thirty-first day of December, nineteen hundred and forty."—[King's Recommendution signified.]—[Mr. Montague].

The UNDER-SECRETARY of STATE for AIR (Mr. Montague): The reason for this Motion and the Bill which is to be introduced, is that, after full consideration of the constitutional position and practice, and of the precedents, it is considered to be desirable in future that the Secretary of State for Air should have statutory authority to make those long-term agreements with air transport companies entailing the payment of subsidies
over a period of years, which have been found necessary all over the world in reference to civil aviation in its present state of development. A number of these agreements have been made in the past, and it is expected that a number of agreements of a similar character will be made, notably for the air service to South Africa, which it is hoped to institute before the end of the present year, and for the air service to Australia, which is now under discussion with the Government of Australia, and which, we hope, will come into operation in the not too distant future.
I would like to emphasise that the existing agreements have, as a matter of course, been throughout subject to the approval of the House. White Papers have been laid, and not only have the main provisions been presented to the House by that means, but the funds required to pay the necessary subsidies year by year have been voted annually by the House under Vote 8, which has been put forward for discussion when the Estimates have been introduced with the specific object of facilitating a discussion of the Government's civil air policy and the general question of subsidy arrangements. It has been felt, however, that on the whole, it would be advantageous, as well as in accord with the established usage, to give the Secretary of State for Air express statutory power to make arrangements of this character in view of their long-term nature, and the fact that such agreements once made must be binding upon successive Parliaments for their whole currency, and may exceed the life of a Parliament with whose approval they were originally concluded.
Though there are no precise precedents, it has long been customary when dealing with similar agreements which are to be binding on future Governments and Parliaments, to make them a subject of statutory authority, as is now contemplated. For the rest, there will be no change in the present procedure. It is intended in the future, as in the past, as and when each new agreement reaches its appropriate stage, to inform Parliament of its main features, and there will, of course, continue to be opportunities for discussion in the annual Debate on the Air Estimates. I will not trouble the Committee with an explanation of the
reasons for taking the figure of £1,000,000 gross as the overriding aggregate amount for all subsidies possible under such agreements for any one financial year, because that is fully explained in the Memorandum which is in the hands of Members. I think that the reasons for that figure are clear.

Lieut. - Commander KENWORTHY: Which Memorandum is that?

Sir SAMUEL HOARE: I am sorry that you, Mr. Young, should have had to read out so long a Financial Resolution, because it seems to me that this Resolution, and the Bill which is to be founded on it are totally unnecessary. It is a work of departmental pedantry. For 12 years ago, since Exchequer grants were first made to civil aviation, and during the five years of my own experience, a certain procedure has been adopted. As many as five long-term agreements were made during my period of office. Details were given of them, White Papers were laid, and opportunities were offered to the House to discuss them, but not a soul in any party in the House ever suggested that further authority was needed by the Government. Yet to-day we are asked to take up the time of the Committee with a Measure which, owing to its financial character, will take up a lot more time in future, and will do something which is not at all needed. If statutory authority has been needed during the last 12 years, why did not someone say so? We have had a number of these agreements; I was responsible for five of them, and there has been no suggestion in any part of the House that any Bill of this kind was at all necessary.
I should have thought that the Government had quite enough upon their hands without embarking upon a new Bill of this kind and taking up time which, so far as the Opposition can judge, is urgently needed by the Government for getting through the programme which they already have upon their hands. Having said that, I should not like it to be supposed that I rise to oppose the Motion. If the Government like to waste the time of the Committee and of the House, that is their affair, and I am not going to suggest to my hon. Friends that they should oppose Amendments to it or vote against it. Assuming that a Financial Resolution and a Bill are
needed, the details of this Motion seem to me to be unobjectionable. It is obvious that, if you are to make contracts with civil aviation companies, and if the subsidy is to be something more than a yearly dole, these contracts must last for a number of years. When I first went to the Air Ministry, there were in existence a number of short-term agreements running, in most cases, for only a year. The result was that the operating companies were merely living upon the amount of dole from the Air Ministry, and at the end of the year they came along and asked the Air Ministry to make up a deficiency.
With that experience behind them, and with the further experience of contracts which we have made with the Imperial Airways Company, it is quite clear that, if ever the Treasury and the Air Ministry are to get their money's worth, contracts of this kind must be made for a number of years, and should, I suggest, be made upon a descending scale, so that in the later years smaller subsidies should be paid. In this way an incentive would be given to the operating companies to make their services economic and independent of Government assistance. That has been the basis of the action of the Air Ministry for many years past. So far, then, as the question of authority to make long-term agreements is concerned, I say, without any reservation, that the only agreements that are worth anything at all are long-term agreements, and that short-term agreements, judged by past experience, leave you in the end in no better position than when you began them.
The second part of the Financial Resolution deals with the actual amount of money to be voted for the next 10 years, which is a sum averaging £1,000,000 year. That may seem to some hon. Members a large sum. Of course, £1,000,000 a year is a substantial item of national expenditure, but when we look at the expenditure of foreign countries, £1,000,000 a year is really quite a modest sum to spend on civil aviation in subsidies. Our neighbours in France are spending three times the amount that we are spending; in Germany twice that amount is being spent; and in the United States of America something like seven times that amount. Those figures show that £1,000,000 a year is not an unreasonable sum for this country to spend on civil
flying. It is often thrown in our teeth that we spend so small a sum upon civil flying. It is a small sum, but when I say that I do not wish it to be thought that the efficiency of the civil flying in any country ought to be judged upon the amount of subsidy that is being voted in support of it. If civil aviation were merely a matter of spending money, it would be a very simple affair.
I suggest that the real test to apply to expenditure of this kind is not the amount of money to be spent over the next 10 years, but the test of the efficiency, the safety and the regularity of the country's civil aviation services, and, no less, the important question of whether that civil aviation is ever likely to become self-supporting and independent altogether of Government subsidy. Even if it would be in order to do so, I do not wish to go into detail on all those points on this occasion, but I will venture to tell the Committee that, judged by these tests, our civil aviation will stand comparison with that of any other country. Take, for example, the question of whether or not our civil aviation is becoming more or less dependent upon Government subsidies. Year by year our civil aviation is becoming less dependent upon subsidies. It would be possible to give figures to show that year by year the operations of the Imperial Airways Company are becoming more self-dependent, and I very much hope that during the next 10 years, the period in which this money will be spent, we shall see our aeroplane services become self-supporting altogether. The whole basis of the last two agreements we made with Imperial Airways Company was that after a term of years they would need no further Government subsidies at all. In the case of the agreement we made for the India route, I think there are still six or seven years to run, and I hope that during that time the service will become so completely self-supporting that at the end of the period it will need no such aid as is proposed in this Vote.

Mr. MONTAGUE: It has eight years to run.

Sir S. HOARE: Unless things have greatly changed in the last 12 months, I very much hope that the eight years will prove to be a sufficient period. I imagine that this Resolution covers subsidies to airships as well as aeroplanes, and I
also hope that during the period in which these grants will be payable we shall see a commercial airship service operating between this country and the distant countries of the Empire and of the world. I can quite imagine that in its early years such a service will need substantial subsidies, and I certainly hope that in this 10 years we shall see at least one Empire airship service in actual operation. Let me end as I began by saying that I think the Government are wasting the time of Parliament in asking for this Resolution and this Bill, but, if they want the Resolution, then so far as I am concerned, I say, "Let them have it."

Lieut. - Commander KENWORTHY: The opening sentence and the concluding sentence of the right hon. Baronet's speech were extraordinary. Here is the temporary leader of the Opposition complaining of an opportunity given to Parliament to discuss the voting of £1,000,000 a year for the next 10 years, £10,000,000 in all! What has become of the economy campaign? Here is an opportunity for checking possible extravagance, yet the right hon. Baronet hotly complains that my hon. Friend the Under-Secretary of State for Air is giving Parliament an opportunity of examining the expenditure. I entirely disagree with the right hon. Baronet. Being a supporter of the Government, I want to help their business through, but I would like to ask for some information about the Vote. This civil aviation question is so important that on the few opportunities we have of discussing it, apart from the question of the air defence of the Empire, we have a, right to ask for information. The right hon. Baronet asked whether this money included subsidies for airships? May I reinforce that request for information? If any of the money is to go to airship development, how much is to be used for that purpose? I am very anxious that too much money shall not be spent on subsidising airships, to the detriment of the heavier-than-air services, especially when the Imperial air routes are extended to the Antipodes and South Africa. I hope the time will come when the whole £1,000,000 will be usefully expended on heavier-than-air craft carrying mails and passengers to distant parts of the Empire, and I should be alarmed if there were a chance of its being swallowed
by an Air Ministry that might possibly have gone temporarily airship mad. It is a curious disease, this airship disease. People start by being sceptics, and then become tremendous enthusiasts, thinking that aeroplanes are absolutely useless and that nothing matters but airships. I am a little afraid that that disease might afflict an Air Ministry in future years, and that heavier-than-air mail transport might be starved.
My next question is whether the Air Ministry is in continual communication with the Postmaster-General, who, I am sorry to see, has been called out of the Committee. The Postmaster-General can help enormously in the very ideal the right hon. Baronet has in view, namely, that civil aviation shall one day become self-supporting. A tremendous filip can be given to it by proper payment being made for the carriage of mails. There is the question of air transport between England and Ireland and between the Isle of Man and England. Those routes could be opened with a passenger-carrying service. There is also the question of the carriage of mails to Australia and South Africa. I hope that in the matter of these services the collaboration between the Air Ministry and the Postmaster-General is of the closest; I have no reason to doubt that it is not, but I would be very glad of reassurance on that point. I must again point out, as I have in previous Sessions, that whereas we vote these large sums of money every year they are not spent. The right hon. Baronet did not spend anything like the money that we voted and that he could have spent on subsidising civil aviation. He spent only £360,000 on civil aviation subsidies in his last Estimates, including the National Flying Services and the light aeroplane clubs. He could have spent £1,000,000, but spent only £341,000 on civil aviation subsidies. My hon. Friend is spending only £428,000. That is a welcome advance, but it is not £1,000,000, and I am sorry that he is not doing more to encourage this vitally-important Imperial service.
When we are tying our hands in this way I think that we have a right to know a little more about the policy and the work of the present monopoly of Imperial Airways Company. I am not attacking the company. I have, in my humble way, paid a tribute to what I
think is their very efficient service, and the devoted care and attention to their duties shown by their representatives in very unpleasant and out-of-the-way parts of the world, and I am sure the right hon. Baronet will bear me out in that. They have a splendid staff, especially in the Middle East, and they have a wonderful service which has combined commercial efficiency, as far as I can see, with the devotion to duty of a great public service. Therefore, I make no attack upon them, but we have to judge by results, and it is the woeful fact that we are still only the sixth or seventh nation in civil aviation. The comparison between this country and the leading Continental countries is very gloomy for those who had hoped to see this country leading in civil aviation, as I believe we do in design and in the art, of flying. Is it convenient for my hon. Friend to make any statement with regard to future policy in this matter? On 18th March, when the House went into Committee on the Air Estimates, my hon. Friend the Member for Northampton (Mr. Malone) raised the question of policy and of monopoly of information and the Under-Secretary then stated:
That is one of the questions being considered by the consultative committee.
That was a reference to the consultative committee on civil aviation set up by my Noble Friend the Air Minister—
and I had better ask the hon. Member to wait until the whole question has been thoroughly gone into by the Committee."—[OFFICIAL REPORT, 18th March, 1930; col. 2000–1, Vol. 236.]
That was some six weeks ago. Is my hon. Friend in a position to say anything further on that subject?
I see that the Memorandum refers only to certain European services and the weekly service to India and the hope of an extension to South Africa. On that occasion my hon. Friend the Member for Northampton drew attention to the important question of the West Indies. A civil aviation service between the West Indian islands would achieve far more than connecting those islands. It could be a great link between North and South America and of immense importance. Again my hon. Friend the Under-Secretary replied that the consultative committee was looking into the matter. I would like to press him now as to whether
he can give the Committee any further information on these points—the policy with regard to the future of the monopoly at present enjoyed by Imperial Airways Company, and whether it is intended to maintain it; and the question of the extension of the Imperial air lines. In spite of the presence of an hon. Friend who sits for one of the Essex Divisions, and who always becomes hilarious when I mention it, I must refer again to the air mail route between Galway Bay and the Continent passing by way of the North of England, and across the North Sea to Hamburg. When the Air Estimates were under discussion my hon. Friend the Under-Secretary said negotiations were going on. Have those negotiations succeeded? Have we any hope this year or next year of seeing something done, or is a German company to be allowed to step in and organise this very important air service route which would bring about a saving of many hours, amounting, indeed, to days, in the transport of mails across the Atlantic to the Continent.
I hope that the Under-Secretary will not mind my pressing him for further information. I am afraid I have neglected my usual practice of giving him notice of these questions and, therefore, I shall not mind if he has not the necessary information at the moment, but I do ask for a little hope, guidance, and encouragement for the people outside this House who are trying to organise these services, and for the great municipalities who have established their own aerodromes at the request of the Air Ministry. The right hon. Member for Chelsea has insisted on the national importance of this responsibility on the part of municipalities, and I should like to know whether they are to get any encouragement.
Civil aviation in this country will not come into its own as long as it is under the Air Ministry as at present constituted. It is bound to be overshadowed by the military service. That is unavoidable I fear. Recently, when I was flying in the Middle East, I had occasion to apply to the military authorities for information about the times of the air mails, and while they were courteous and willing to help they made it perfectly clear that this branch of civil aviation, our longest air route, was no concern of theirs. They said that they did not
interfere, that they had no official connection. If there was an accident and the pilot and his passengers were captured by any tribe they sent out an expedition, but that was the only kind of interest to which they would confess. As long as civil aviation and military aviation are under one roof the military is bound to overshadow the civil side. What is the remedy? The remedy is to put civil aviation under the Ministry of Transport. That would be the salvation of civil aviation. I do not make any kind of reflection on my hon. Friend, who has only been a few months in office, but we expect more important results and greater developments in civil aviation from him than the right hon. Member for Chelsea was able to achieve during his five years of office.

Sir HILTON YOUNG: I rise to ask the Under-Secretary to elucidate further this rather curious procedure. I confess that his explanation and the comments of my right hon. Friend the Member for Chelsea (Sir S. Hoare) must have left the Committee somewhat mystified as to its intentions. If I understood the explanation of the Under-Secretary, which I followed with close attention, it is this—that it is necessary for him to get statutory powers in order that the Air Ministry may have authority to make contracts involving the expenditure of public money covering a term of years. If that is the doctrine it is certainly mystifying statutory authority may be necessary, but if it is, how is it reconciled with the existing procedure in regard to other spending departments? I ask for enlightenment. What is it that differentiates the position of the Air Ministry from the position of the Board of Admiralty when they make contracts covering a term of years and involving the expenditure of public money, or from the Secretary of State for War who is always making big contracts covering a term of years involving the expenditure of public funds? Or take an analogy which is closer still, the analogy of the Post Office. What is it that distinguishes the position of the Air Ministry from that of the Postmaster-General who is making contracts of the same kind? Is it the case that all these spending departments base their powers to make such contracts on particular Statutes and if so, what are the Statutes upon which the powers are based?
There is here something more than a mere question of procedure; there is a question of some practical importance. Since the business activities of the Government are regrettably constantly extending, it is desirable that they should be able to conduct them in a businesslike way and free from red tape regulations devised for a different state of society. This leads me to the second question I desire to ask: whether the Bill which is to be based upon this Money Resolution is intended to make any difference in the manner in which specific contracts are to be presented for the consideration of the House of Commons. The manner in which they have been presented hitherto is eminently practical. A White Paper is issued stating the nature of the contract and there is an opportunity for discussion on an appropriate occasion such as the Estimate. That procedure, I imagine, has been satisfactory in practice, and should be maintained. But some doubt may arise lest it be intended to restrict the opportunities for the consideration of these important agreements. Every agreement relating to a subsidy is important from the point of view of public control. There may be an intention to alter the procedure. The Committee I think would deprecate any reduction of the opportunities on the part of the House for the consideration of these agreements, or any advantage being taken of these new powers which are now being sought to deprive the House of Commons of opportunities for considering each agreement.
I should like to have an assurance from the Under-Secretary that it is not intended to deprive the House of Commons of any opportunity, on a proper occasion, of considering each particular agreement. On the other hand I think we should make sure that there is no intention to commit an error in the opposite direction, and introduce into this new sphere of business the obsolete and elaborate system of control which exists in regard to mail contracts made by the Post Office. I hope it is not intended to duplicate the cumbersome system which is necessary in regard to those

Major Sir ARCHIBALD SINCLAIR: I confess that when I saw the White Paper I was more hostile to it than I am now after hearing the speech of the
Under-Secretary for Air. I shared the mystification which previous speakers have expressed as to the need for this Bill, and the only reason which occurred to me was that if the Money Resolution was voted and the Bill was passed the Secretary of State for Air would be free to spend a million pounds a year on this object without coming to the House of Commons. The Under-Secretary, however, has made it quite clear that there is no such intention and that every agreement will be brought before the House of Commons. The right hon. Member for Sevenoaks (Sir H. Young) has referred to the practice of other Departments of State, and the Air Ministry has entered into large contracts for a term of years which they have brought before the House of Commons without any need for the statutory authority which the Bill will provide for in the future. I ask the Under-Secretary, who has a mastery of the business of his Department, to make clear to the Committee exactly what the Bill is intended to do and how his Department will be in a position to act more effectively for the promotion of civil aviation in the future than they are at the present time.
It is quite true, as the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) has said, that this country leads in design and in air flying. Where we lack is in the actual mileage on our air routes. That is not a reproach on successive Secretaries of State for Air, who have shown great keenness in the discharge of their responsibilities; still less is it a reproach on the Air Ministry, who have devoted themselves to the promotion of the interests of civil aviation. It is a reproach on the country as a whole, on public opinion as a whole, on the lethargy and ignorance which have characterised the inhabitants of this country on this question. I am sure that the promotion of civil aviation will receive some little impetus from the general welcome which the proposals of the Ministry have received this afternoon but, obviously, there is great need for pressing on in this matter, and in so far as this Bill means that the Secretary for Air will have at his disposal larger resources for the promotion of aviation, bearing in mind what is the true test of progress, it will be helpful and to the advantage of this country.
The hon. and gallant Member for Central Hull referred to the possibility of handing over civil aviation to the Ministry of Transport. I hope the Under-Secretary will strengthen his grasp, and will not for one moment allow it to be handed to the Ministry of Transport. It would be a most retrograde step. We lead in design, and great steps are being taken by the Air Ministry in research work. In all these ways we are making progress. If we were to divorce civil aviation from the Air Ministry, which is the main source of energy in all these developments, and put it under another Ministry, where it would no longer share in the same research work or in design and construction development, it would be a most retrograde step. It is much better to allow all our research work to be centred in one Department, which can devote all its energies, with the full support of this House, to the development of all forms of aviation. In this way civil aviation gains enormously from its association with the developments on the military side.

Lieut.-Commander KENWORTHY: Has the hon. and gallant Member considered the analogous case of the mercantile marine and the Admiralty? What mercantile marine should we have had if it had been associated with the Admiralty?

Sir A. SINCLAIR: The formation of the mercantile marine preceded the formation of the Navy. In fact, in the mercantile marine you had the foundation of the Navy. In the air the development has been exactly the reverse. In the first place, you had a great military machine. Then you had this infant, this child, of civil aviation. The best way in which you can develop civil aviation is to give it the advantage of a connection with the developments which are mainly proceeding for military purposes. Therefore I hope that the Under-Secretary will give us a little explanation of the purpose of this Bill. So far as I understand its purpose and the policy which lies behind it, I give it my full support.

5.0 p.m.

Mr. MATTERS: I want to endorse in one sense the appeal made for some further enlightenment on the question of policy. The Prime Minister, replying to a question whether it was proposed to separate civil from military aviation,
answered in the negative. He said civil aviation in this country was not under military control, that the Air Ministry was the Department which looked after civil aviation, and he added that the Government did not contemplate any alteration in the existing system. That is quite true. Civil aviation is under the Air Ministry, but nobody who is at all familiar with the conduct of the Department is under the slightest doubt that military needs are the basis of air policy, and these military needs—I am not complaining in the least—have a crippling effect on the development of the aircraft industry, and to a considerable extent on the development of aerial services in other parts of the Empire.
Reference was made to the situation in the West Indies. Those islands are peculiarly adapted to commercial air services. I am given to understand that the whole question of air services in the West Indies is under consideration by the Civil Aviation Department of the Air Ministry at this time. But it has probably been under consideration ever since aviation was developed, and nothing has been done in the West Indies. They suffer very badly from the lack of ordinary commercial steamship accommodation, so that the position is ideal for an air service. These islands represent ideal jumping-off places. The distances are not great, and an air service is probably, within reason, tine ideal system, for mail communication at least, and possibly passenger communication.
In respect of the airship construction industry, if I may discuss that matter within the bounds of this Resolution, the great difficulty is that the military needs of the Department are always paramount over the construction of machines of different types. It is agreed that the machines made here are recognised to have the best and fastest engines in the world, but they cannot be sold abroad except under conditions which practically make their export impossible. I think the Minister will agree when I say that excellent machines, probably superior to those of any aircraft manufacturing country in the world, are prepared here under the stimulus of military needs, but unfortunately the military needs dictate that the sale of these machines abroad can be permitted only after long and expensive tests.

The CHAIRMAN: The hon. Member is not in order in discussing the aircraft construction industry within the terms of this Resolution.

Mr. MATTERS: I am sorry that I cannot discuss this question: it is vital and has a most important bearing on the future of civil aviation, because unless aircraft constructors can turn out these machines under the sanction of the Air Ministry for aerial services, these services will have to suffer; but if I cannot, within the rules of debate, continue that subject, I must satisfy myself with saying that I do hope the Ministry will seriously consider whether it is not possible to a considerable extent to separate the military needs of the Ministry from the requirements of civil aviation, and in such remote parts of the Empire as the West Indies, and no doubt other areas, thus give a stimulus to civil aviation.

Captain HAROLD BALFOUR: I feel that I cannot allow this Resolution to pass without some words of protest against it, as I happen to disagree on major points with every speaker who has spoken on it. I will start with the hon. and gallant Member for Hull (Lieut.-Commander Kenworthy). He spoke of the possibility of an air service from Galway across the North Sea. But the prospects of civil aviation vary inversely to the facilities of other forms of transport over a particular area. If there are roads or good railways the chances of civil aviation are very small as compared with the prospects from one place to another in, say, Western Australia or Canada; and when the hon. Member suggested that this service was a crying need he was speaking with that eloquence and sincerity which everybody admires, which gives him always Hull as the centre of his arguments, whether he is speaking of aeroplanes or trawlers. The right hon. Baronet the Member for Chelsea (Sir Samuel Hoare) sits on my own Front Bench, but I should like profoundly to disagree with a great deal that he said, and I do not think I entirely agree either with the gentleman who spoke just before him. The right, hon. Member for Chelsea has to defend a continuation of what he initiated, and, while I have the honour of sitting on these benches, it is what I shall never be afraid to condemn from the point of view of one interested in aviation.
There are eight more years to run of this monopoly, this agreement, with the Imperial Airways, and although we are voting £1,000,000 for a subsidy we are really voting the greater part of that subsidy to Imperial Airways. The right hon. Gentleman said that long-term agreements are eminently desirable. I think they are, but a long vision is even more desirable than a long-term agreement, and I cannot see the end of the 10 years' agreement into which we entered with Imperial Airways carrying us very much further towards making that company a self-supporting economic proposition. The reason I make that statement is that the whole basis of the present agreement for payment of subsidies on air lines in this country—and although we talk of air lines we have only one, and that is Imperial Airways, so that I am quite sure no hon. Member will take exception if I use the name of Imperial Airways—the basis of our agreement with that company is a policy which is not good for aviation under the conditions in which the subsidy is paid. It is based on a policy which, as results prove, is good for certain portions of aviation. It is good for safety and poor for machines, it is excellent for the shareholders, but it is very poor as far as the development of our civil aviation goes.
There had to be a start somewhere, and I want to say—I was not in the House of Commons at the time, but I have had something to do with aviation—that it was a splendid start. Do not let us continue, however, to shut our eyes to the fact that there will have to be a quick change of direction when the subsidy agreement comes to an end. I know the Government is bound to this long-term agreement, but long before it comes to an end we shall have to warn Imperial Airways and other companies that we shall not necessarily continue. We must not in the ninth year wake up to find a financial crisis, the whole country saying that civil aviation must go on, and that a subsidy is wanted in order to keep it going. I think this Resolution will be passed, but I would give it with considerable reluctance unless there is to be some long vision which has as its ideal the making of aviation a self-supporting proposition, not from London to Manchester, but possibly from Montreal to Vancouver, and across Australia. Let us think of long
distances, and, if necessary, let us spend on them some of the money we have spent in the past. We should shut down the London to Paris service if that were needed in order to have an Indian or Australian service. If we are to give this money, I hope it will be with a view to an aviation which in the future will not be dependent on the House of Commons passing such a Resolution.

Mr. MANDER: I think the hon. Member was unfortunate in saying that services succeed in indirect ratio to the existence of inland transport. There is, for example, the service from Croydon to Le Bourget.

Captain BALFOUR: I did not say that the air service was not working satisfactorily from some points of view, but as civil aviation it is a failure, because it can never be self-supporting. If you are going to judge on success of running, it is a success, but as an economic proposition it is a failure.

Mr. MANDER: That is for the future to decide. The hon. and gallant Member holds one view and I hold another. In rising to support this Resolution, I would like to put one or two questions. In the last 10 years I have made a great deal of use of facilities for air transport to the Continent and back, and I should like to pay a tribute to the care and skill of the pilots and to the efficiency of the ground organisation which has built up a service second to none in the world. I want to ask if this grant would be available for such a purpose as this: The Belgian Sabena Company runs a service from Brussels to London regularly. Would it be possible to pay a subsidy to that service in order that letters posted one night in London could be taken to Brussels and delivered there next morning and vice versa? Would it be available for that purpose, or would that be a matter for an Estimate by the Post Office? I should also like to know whether this money would be available for the airship service? Suppose the R.100 or the R.101 were to run a service to Montreal, would the money which we are now voting be available for a purpose of that kind?
What other routes are contemplated? There is a service running to Delhi, and there has been a statement made that that service will ultimately be extended to Calcutta, Rangoon, and then to Australia. Has the Under-Secretary any further in-
formation on that point? I would like to know if the Government contemplate any other services in addition to those to Australia and South Africa? Do they contemplate establishing a service to the Irish Free State or to Ulster? I should also like to ask a question in connection with the service now running to India. Has it been definitely decided not to continue negotiations with the Italian Government for running down the coast of Italy, and has it been decided to continue the service via Athens? I hope that is so, because it is a quicker route, and, in those circumstances, no useful purpose would be served by continuing the negotiations with the Italians when a better alternative route is available.
I should like to ask whether, in making the grant for a subsidy, it would be possible to attach conditions for controlling the type of machines to be used, or the engines. For example, would it be possible to make a condition that a three-engined machine should be used for a particular service? I think Imperial Airways continued too long with their two-engine Handley Page. I hope that we shall be able to insert some conditions giving control over the type of the machine, and the number and power of the engines that may be employed. Will any of this money have any conditions attached to the granting of it relating to the military side of aviation? There is a general feeling amongst nations dealing with disarmament that civil aviation should be allowed to develop on its own. I think it is very important that we should not allow any connection to grow up between civil and military aviation, and I should like the Under-Secretary to assure us that there is no sort of connection and no thought of dealing with aircraft from the point of view of development for war purposes. I hope that we shall have a clear and definite assurance on that subject, and, if we do not have such an assurance, I am sure many hon. Members will be very dissatisfied. Those are the only points I wish to put to the Under-Secretary, and I hope that he will be able to give an answer to them.

Mr. MONTAGUE: I have been asked to explain more fully the reasons for this Resolution and the necessity for moving it. I have also been asked a question
about long-term agreements. The reason for making long-term agreements a matter of statutory authority is simply to bring the whole question of air transport subsidy into more satisfactory relation to constitutional usage. It has been felt that on the whole it would be more satisfactory, as well as in accord with established usage, to give the Secretary of State for Air express statutory power to make agreements of the character under consideration, that is to say, if such agreements are made they should be made under definite statutory authority for the whole period, whatever changes there may be in Parliament.
So far as procedure is concerned, there is no proposal whatever to make any difference. The main provisions of the agreements which have been approved hitherto have been issued in the form of a White Paper, and the whole question of subsidies has been under discussion when the Air Estimates have been introduced. That means that while in the past there has been no doubt whatever about the authority of Parliament, it has nevertheless been thought necessary to give this definite statutory authority which I have already explained. This is merely a question of constitutional usage, and the placing of air transport subsidies under the same constitutional usage and procedure that applies to other Departments. That is my answer to the questions which have been asked me in regard to what happens in the case of the Admiralty and the Post Office.
I must take exception to the way in which hon. Members have been speaking about an annual expenditure of £1,000,000. That sum is a gross covering figure, but there will not be an expenditure of anything like £1,000,000 for the purposes indicated by the hon. Member. I only wish there were such a sum as that available for civil aviation. With regard to subsidies this year for the London-Karachi route, the total is £333,000, which is a long way from £1,000,000, and the subsidies, even after including further subsidy in respect of the anticipated extension for the South African service, are in the nature of diminishing subsidies, and there is a gradual diminution of the amount year by year. It is hoped and believed that, within the amount appropriated, it may be possible to extend
the advantages of civil air transport. The gross figure has to be taken into account in relation to appropriations-in-aid. The expenditure incurred for the South African service include considerable appropriations by the South African Government and other Governments in the areas in which the service will be run at the end of the year.
I am asked whether this Resolution and the Bill will allow money to be spent on the subsidising of airships. The word "subsidising" seems to have been confused with Government expenditure for development. I would like to point out that we have spent a good deal of money on research and development in connection with our airship programme. The question of subsidies has to do entirely with the policy that will be decided upon after the airship tests have been undergone and when we know the exact position, and that expenditure is quite apart from any further development for commercial purposes.

Mr. MANDER: Then it would be quite in order to use the money for such purposes?

Mr. MONTAGUE: That is what I was going to say. If commercial aviation develops, it will be possible for the money to be used in that way, just as it is used for subsidising the development of heavier-than-air transport services. The question of the monopoly policy in regard to existing subsidies to Imperial Airways has been referred to. Subsidies will last for a number of years. That does not mean a monopoly of services, but it is a policy which was decided upon as an experiment as the result of previous experience and the direct outcome of the conclusions of the Hambling Committee. We were compelled to accept the principle of the monopoly subsidies. Competition was tried before the present system, and it was a disastrous failure. May I quote the conclusion of the Hambling Committee on that point? They say:
We believe strongly in the many-sided advantages to be derived from healthy competition in business, but we cannot apply that description to the competition which existed between the British operating companies under the 'temporary' and 'permanent' schemes, nor do we think it could be applied to any competitive conditions which could be created in civil air transport as it is at present. The amount of the subsidies and compensations paid by
the Air Ministry under these schemes was approximately double the passenger and freight revenue, so that the burden of the financial risk was mainly on the Government, which was, therefore, in effect competing with itself. There was not sufficient demand for air traffic to afford the conditions essential to real competition, and the result under the 'permanent' scheme was, therefore, to increase the number of British aeroplanes on the London-Paris route, with consequently increased expenditure on flying costs, insurance, and depreciation, and to reduce the number of passengers per machine, while the unnecessary cost of separate organisations and independent managements was maintained.
I think that that is a very fair explanation of the reasons why a monopoly subsidy policy although not originally undertaken, was ultimately imposed upon the Government of the time, and I am afraid that the existing condition of civil aviation, both in regard to European and Imperial routes, is very little different now, from the point of view of the necessity for concentration and the avoidance of waste in unnecessary competition.
With regard to the comparison that was made by the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) of our services with those of foreign countries, it is not strictly correct to say that this country is seventh in order in Imperial mileage, because, if you are going to make comparisons, you must make fair comparisons—you must compare Imperial conditions with Imperial conditions; you must compare Imperial services with Imperial services. If you do that, and treat the other countries upon the same lines, we are not the seventh, but the second. The total number of British Empire aerial miles flown is 20,850, without taking into account the Projected South African services. That is the second largest mileage, the first being that of the United States of America, which is 46,622. France comes next with 17,500, and then Germany with 16,500, and Italy was 7,303. That is taking, in each case, not merely internal lines or lines going out from the major country, but the whole of the services which can strictly be described as belonging to the respective countries and their interests, and in that respect the British Empire does not stand seventh, but actually second in mileage, while it is true to say that our standards of efficiency in aircraft manufacture, and, even more important, our standards of safety, bear very favourable comparison indeed with
any other similar standards in any part of the world.

Lieut. - Commander KENWORTHY: When my hon. Friend talks of the distances of the routes flown, can he compare the number of machines operating? Obviously, if you fly a certain route once a year, you can total that up, but I hope that what my hon. Friend says will bear every investigation.

Mr. MONTAGUE: The figures I have given are actual mileage figures, not passenger miles. So far as it may be true that you can have a long mileage with very little service and very few passengers, the comparison would be rather in favour of this country than against it, because it is in the long services of some other countries that you have infrequent flights. I cannot at the moment give the particular countries, but I have come across a number of instances where there have been long mileage arrangements but where the passenger mileage was comparatively small, so that really that fact would make the position of this country more satisfactory than otherwise.
With regard to the position in the West Indies, no one regrets more than I do the fact that it has been impossible so far to find a satisfactory solution of the problem in regard to the West Indies. It is a problem which has to do, not merely with Air Ministry initiative, but with the whole question of finance, and it is a matter of inter-Colonial communication and not Imperial communication. That means, of course, that it is necessary that there should be interest to the extent of practical and financial assistance from the Colonies involved. That is not a very advantageous prospect at the present moment. The Colonies are poor, except Trinidad, and, so far as Trinidad is concerned, we do not find that there is very much chance of obtaining financial support at the present moment. That, however, does not mean that the Air Ministry are leaving anything undone that can be done in order to get aviation services going in the West Indies. It will be recognised, of course, that the West Indies are a link between Canada and South America—a very important link in what might be a very valuable and important commercial relationship: and the civil aviation side
of the Air Ministry is doing everything possible. I think that the hon. and gallant Member for Caithness (Sir A. Sinclair) knows what we are doing. We are doing everything possible to get things going in the West Indies, and we have an eye also to the larger Imperial issue of relations between Canada and South America.
I was asked whether the practice will be altered. My answer is "No"; that is to say, the House will have a full statement of every project and every suggestion for expenditure of money upon subsidies in the way that it has had in the past, and just as much opportunity of discussing the whole question of subsidy policy and civil Air policy as it has had.
The exceedingly interesting question has been raised of the relations between civil aviation and military aviation, and it has been suggested that military needs have a crippling effect upon civil aviation and the civil aviation industry. I can assure the Committee that that is not the case. Military aviation does not control the policy or the work of the civil aviation side of the Air Ministry. The reason why the two are associated is fairly well known, I think, at any rate to those who have studied closely the question of aviation generally. It is, as has been pointed out, that, from the standpoint of research, of design and of structure, and from the standpoint also of ground organisation, military and civil needs are almost precisely the same, and they cannot at the present moment be separated. They use the same engines, they use the same principles of propulsion, they use aerodromes of the same character, and meteorological services of the same character. The whole thing is one at the present time, and for that reason it would be not only unwise, but I think disastrous for civil aviation, if it were taken away from direct association with military needs.
That, however, does not mean that military needs have a crippling effect so far as the industry is concerned. I think it would be true to say that but for military needs there would be no civil aviation industry at all in this country. The industry depends upon the demand for military machines, and in that way again, in the actual conditions of the production of craft, the two sides of aviation in this country are inextricably mixed, and they could not with any
advantage be divided at the present time, whatever might be the possibilities in the future. From the standpoint of ideas of militarism, I can, however, assure the Committee and hon. Members who are interested in the subject that there is, I will not say no possibility, but no actuality of interference by the military side on behalf of military needs with the fullest possible development of civil aviation.
With regard to war purposes, the hon. Member who raised the question wanted to be assured that the Air Ministry had not in mind any question of war purposes at all. It is as well to be frank. Of course, the Air Ministry has in mind the question of war possibilities. That is part of the business of the Air Ministry. Aerodromes are serviceable in time of war; pilots are necessary in time of war; particular kinds of planes are required. How far airships or the ordinary commercial planes might be adaptable I do not know; I am not a technical expert; but, of course, an Air Ministry must have these things in view: that is to say, it must take account of the fact that, in regard to routes, for instance, the route from one part of the world to another is very probably not only commercial, but strategic. All these things must be considered if and when you are considering the subject of potential war; but that is not the same thing as saying that war policy and war ideas govern the question of aviation so far as commercial development is concerned.
The only other point with which I have to deal is, I think, that with regard to Italy. If there are others, there will be plenty of opportunity for me to deal with them in greater detail on the Second Reading of the Bill or on the Report stage of the Resolution. With regard to the question which was asked as to the route via Athens to Alexandria, the negotiations are still being undertaken with the Italian Government, and it is anticipated that before long satisfactory arrangements will be made for a route via Corsica and Naples to be undertaken. I do not know if that is a sufficient answer to the hon. Member who asked the question. I have tried to deal with all the points that have been raised, and I hope that we may now have the Resolution.

Question put, and agreed to.

Resolution to be reported To-morrow.

OVERSEAS TRADE BILL.

Order for Second Reading read.

Mr. GILLETT (Secretary, Overseas Trade Department): I beg to move, "That the Bill be now read a Second time."
I think it will best suit the convenience of the House if I confine myself now to moving the Second Reading. I gave a very full explanation of the objects of the Bill when the Financial Resolutions were before the House. If it is desired to put any questions to me, I will answer them, with the consent of the House, towards the end of the discussion.

Mr. DOUGLAS HACKING: I cannot very well complain of the hon. Gentleman's attiude. If I did so, I am sure he would recollect that I did practically the same thing, at any rate I made very few observations when I moved the Second Reading of a similar Bill not many years ago. But I would remind him of the promise that he made in the discussion on the Money Resolution to deal with the question of long-term credits. Many Members of his own party demanded an explanation, especially with regard to business with Russia, and I hope he will not forget to give us his views in connection with long-term credits, especially as applying to that country. During the Debate on the Money Resolutions, I made several suggestions, and I hope he will also let me know his views on them. I will repeat one or two of them. In the first place, I asked him whether or not he would have prepared as a separate paper by the Exports Credits Guarantee Department the commercial accounts in the new form in which they are going to be presented. He told us that at present they are published in a Blue Book issued by the Public Accounts Committee, but that is not quite enough. It ought not to be necessary for anyone who is interested in insurance work to have to purchase a large volume containing many other matters in which he is not interested. It would be to the advantage of insurance as a whole, especially this kind of insurance, if these accounts were published separately by the Department.
I am sure such a presentation of the accounts would be welcomed by many who propose to take up this work in the near future.
The second suggestion I made was in connection with the extension of the export credit guarantee system to include munitions of war, such as the construction of war vessels in this country for use by other countries. When I made that suggestion the right hon. Member for St. Ives (Mr. Runciman) said it was something akin to a parson praying that there would be no shipwrecks during the coming winter but, if there bad to be shipwrecks, let them be on the British shore. I do not think that is a very bad policy, and I take up that line in regard to the building of war vessels. If we do not construct them, and they are constructed in foreign shipyards, we actually lose. In the present condition of our shipyards, it might not be considered a very large extension to grant facilities to allow the construction of these ships to be helped by granting the facilities which are already granted in other countries. I know the hon. Gentleman will reply that he cannot do it because of the Act of Parliament, but it is possible to amend this Bill so as to enable those credits to be offered. I have been informed that certain vessels of war which used to be constructed here for certain other countries are no longer built here. We used to build ships for Turkey and Greece, and their construction has now gone to Italy, I am told, and that is very largely due to the fact that the Italian Government is giving financial assistance to the various yards. If that is so, it is very much to our disadvantage. If we can give some measure of assistance to enable us to get back the building of those ships, it will be very much to the advantage of our workpeople. I wish to make it perfectly plain that I am not asking the Government to construct these ships unless they would be constructed in any case elsewhere. In other words, the Government must satisfy themselves that these ships would be constructed by British instead of foreign labour. They must, therefore, be able to give a licence for every ship that is to be constructed in the same way that they do at present. I ask that, if they can give that licence, they should also give the credit facilities which I believe are
being given in other countries and as the result of which we are losing this trade.
Another suggestion I made was in connection with the maximum credit outstanding at any one moment in connection with Russian business. I believe the Minister would be well advised to have a maximum. I pointed out on the previous occasion that, although Russia has met all her liabilities up to now so far as this scheme is concerned, if and when she failed it would be a huge failure as they were not dealing with individuals in Russia, some of whom might remain solvent, but with the nation as a whole, and thus every debt that was awed us from Russia would go. Therefore, especially in view of the very large volume of trade that is being done at present, it would be very wise to fix the maximum credit outstanding at any one moment.
I also asked the hon. Gentleman one or two questions which he has not answered up to the present. I asked whether there was any private company in this country that was getting nearer to the terms and conditions that are offered by the Export Credit Guarantee Department. There was an indication in the Report of the Committee of Experts that sooner or later this business should be taken out of the Government's hands and be given to private enterprise. When I was at the Department, there was a certain firm that was interested in this business. It is true it was insuring home business as well as export business, but they were prepared to give very great attention to this question of export credits. They were some distance off when I was there, but I should like to know whether they have moved any nearer and whether there is any chance in the near future of their offering the same facilities that are offered now by the Government.
I also asked the hon. Gentleman what was the present loss ratio. By that I mean the ratio that losses by bad debts bear to the premium income. When I was at the Department our losses were about 60 or 65 per cent. of the total premium income. That left about 40 per cent. with which to pay the administrative, expenses of the Department. That, of course, was not sufficient. I should like to know whether there have been any great losses which have put up that percentage. We have a right to know
exactly what the financial position is; 40 per cent. of the premium income is not sufficient for administrative expenses, though it is possible that the hon. Gentleman may have been able to cut down those expenses sufficiently to pay his way. I hope he has, but I should like to know what the present loss ratio is.
My final question is this: Is Germany reducing the credit facilities that she has previously offered to Russian business? Some time ago there was a rumour to that effect. If that is so, we ought to know about it. There must be some reason for it. I think the hon. Gentleman might be warned, perhaps, by the attitude that is being taken by a foreign country which is a great deal nearer to Russia than we are, and probably knows more about the present situation. Russia appears to be the spoilt child of the British Government. We grant her facilities which we quite definitely refuse to other countries. Not all those facilities are granted by the hon. Gentleman's Department.. Most of them have been granted by the Foreign Secretary—for example, diplomatic immunity. Does Russia grant us any special terms or conditions in return for the special terms and conditions that we give her? I think the answer must be "No." They expect us to buy from them, but in return they seem to buy as little as possible from us. The latest comparative figures I can find in connection with trade between the United States and Russia and between Great Britain and Russia date back as far as 1927. We then bought from Russia. £21,000,000 worth of goods, and only sold £4,500,000 — balance £16,500,000. That balance, instead of being spent in this country, as one would hope, was practically all spent in the United States. In 1927 the United States bought from Russia only £2,500,000 worth of goods, and yet sold to Russia £13,000,000 worth. Those figures are very unsatisfactory. It appears as though Russia is trying to do as little business as she can and buying as few of our goods as she can. The hon. Gentleman might start with advantage to this country the slogan in Russia, Russia should buy from those who buy from them." I do not propose to offer any opposition to the Second Reading, but I hope the hon. Gentleman will answer the questions I have asked him, and pay some attention to the suggestions I put to him on the Money Resolution.

6.0 p.m.

Mr. ARTHUR MICHAEL SAMUEL: I think that it may be convenient to hon. Gentlemen opposite if I address the remarks which I have in mind to the House at this juncture, especially as I trespassed at, some length upon the patience of hon. Members on a previous occasion when the Money Resolution in relation to this matter was before the Committee. I am not in any way opposed to the Second Reading of this Bill. I look upon myself as one of the godfathers of the scheme. My right hon. Friend the Member for Chorley (Mr. Hacking) and I have watched at the cradle the growth of the scheme and have helped to bring it up to the point at which it now finds itself. We will, with all the good will in the world, try to help it forward. It must not be assumed that we shall either oppose the Bill—that is certainly not the case—or that we have any wish other than to help forward the policy which is in the mind of the Minister. This scheme performs a function of much greater value than merely providing the credit which is required for the export trade. It settles once and for all the possibility of complaints being made about lack of credit. It is a good thing to have this matter settled because it is as well to know where we are. If complaints are made, grievances must be removed. Complaint was formerly made that the export traders could not get sufficiently long-term credits from the banks to enable them to carry through their business where long-term credit was required. This scheme has knocked that grievance on the head. It has proved that traders can have no such grievance. Those who desired long-term credits could come, and did come, to the Committee and, with the exception of Russia and one or two other countries where it was not thought desirable to give credit, those who required long-term credit, if the proposed business was warrantable, received it. They received credit under the Export Credits Scheme.

Mr. HOFFMAN: Not beyond 12 months.

Mr. SAMUEL: They obtained it under the Export Credits Scheme, after their applications had been examined by some of the most competent men in the City of London, not acting on behalf of the bankers, but on behalf of the Govern-
ment. Speaking for myself and for my right hon. Friend, anxious as we were to make the scheme a success and anxious to get employment for our people, there was no intention to refuse credit under the scheme if it were on warrantable business. If the business was not warrantable it was turned down. Now we see by the amount of business actually done, that out of the £26,000,000 available, there never were outstanding at any time guarantees for more than £5,000,000 or £6,000,000, of the amount authorised. It may be inferred from that that very little business that was warrantable business failed to get the credit required. Therefore, I think the scheme, quite apart from the paramount purpose of giving credit where it was required, has served another and a better purpose. It has shown us—this process of elimination—that we are not losing business in any great degree because long-term credit cannot be obtained.

Mr. WISE rose—

Mr. SAMUEL: Perhaps the hon. Gentleman will allow me to proceed. I have been a long time in this House and I am not lacking, I hope, in courtesy. It is utterly impossible when an hon. Gentleman interrupts, for discussion on a difficult economic point to continue. I, like other speakers, wish to place myself at the service of the House, but if an hon. Member interrupts, he breaks the trend of thought of a speaker, who is, therefore, not able to do justice either to himself or to the House. I ask the hon. Member not to press me to give way. I shall be pleased to give way at the end of my observations, and if I have an opportunity of answering questions, I shall be glad to do so. In the meantime, I must ask the hon. Member not to interrupt me.
I want to know, as did my right hon. Friend the Member for Chorley, how the scheme is going to be operated? I am not going to indulge in any polemics about Russia, but the fact remains that half the amount of the risk outstanding—but in order to put myself strictly in order I will say only one-third, is used by His Majesty's Government to guarantee the credit of the Soviet Trade Delegation. In other words the scheme is a method to help His Majesty's Government to guarantee the credit of the Soviet Government. I would like to know to what extent the
Government are going to take the risk of guaranteeing Russian credit? Supposing this was not the British Government but an insurance company. That company would not allow 50 per cent. of its eggs to go into one basket. No insurance company would let half of its risks lie with one insurer. Take such a place as the Wood Street area where there is supposed to be a greater risk of fire than in any other part of London. The greatest of British insurance companies, although that area is occupied by firms with warehouses containing volumes of goods owned by some of the greatest and most honourable firms in England, do not care to take much risk in that one district. Here you have, to use the simile, a very inflammable area called Russia where at any time the Marxian theory may bring down the whole financial structure of Russia to ruin through economic exhaustion. Therefore I do not think that it is wise for us to countenance the present large ratio the risks being left in Russia.
In a recent discussion we had in this House on the Cardiff Bill, it was said that the Treasury would lay down the proviso that if they were to have a municipal bank in Cardiff, not more than 50 per cent. might be left in the hands of the Cardiff Corporation for the local purposes of the corporation, but that 50 per cent. must be taken out of the local basket and put in Government Trustee stocks and only 25 per cent. used for local housing. Here you have a British corporation which is second to none in regard to its honour and solvency and yet it is thought in this House that it is not desirable to allow more than 50 per cent. of the deposits in its municipal bank to be left for local use. That fact reaffirms my contention that the Department of Overseas Trade should reconsider the question whether it is wise—and we do not think that it is wise—that the large present ratio of the amount of total outstanding risk should be in Russia or even in any other one country.
I will go further and say, that a map of the world ought to be plotted out so that each area could be examined in order to see what has been the loss experienced in various areas over a period of four years. I devoted part of three recent years to the work of the scheme when I had the privilege of being the
secretary of the Department of Overseas Trade. I was also some years earlier on the Advisory Committee and I know the work well. I am also a member of the Public Accounts Committee and thus am in a position to view the whole scheme from the side of its losses. I speak now as a member of the Public Accounts Committee. We have just been through the trading accounts and balance sheets of this scheme, number 51, page 92, and the Civil Appropriation Accounts number 40, page 249. We do not know sufficiently—we do not want to know about the people or the firms with whom we lose money—about the districts and the countries where the money is lost. If this plotting out of areas were done, the position as far as losses are concerned, could be examined by Parliament much more minutely than we can examine the accounts as they are now put before us. I will take one country. We do not know, but we believe that a great amount of money has been lost in Rumania.. If money has been lost by us in Rumania, the Department of Overseas Trade should examine the position to find out whether it has paid us in the long run, not only the Department of Overseas Trade, but our merchants and manufacturers, to do business with Rumania and whether it is now worth doing at all on credit.
When you look over the period of the last so years and now see our investments abroad of £4,000,000,000 and think what our overseas trade balances have been on the credit side during those 60 years, you want to know what has become of all money left abroad that went out as exports in view of the fact that we are left with such a small amount as £4,000,000,000 as overseas investments. I think that we have lost a great deal of value in exports. What we thought was trade was never paid for and thus goods sold on credit have gone really in the form of gifts. I think that some of our export credit trade which has been done recently, and particularly in relation to Rumania, has been a loss to us. It would have been better to have said to Rumania, "Very well, we cannot let you have goods on credit. Take your credit business to other countries and God bless you! we would rather cry over our goods here than cry after them in your territory and not get paid for them." That is why I say that the world should be mapped out and the risks in each area
examined to see whether it pays us to do credit business in those areas.
I should like to know whether it has paid us to do credit business in Brazil. I know that private people during the last year or so have been losing considerable sums of money in Brazil through bad debts. It is necessary for us to know whether the Department of Overseas Trade has lost more than a reasonable amount under its export credit facilities in relation to Brazil. And so with Mexico. I put a question on this subject to the Foreign Secretary to-day. It is my firm opinion that Great Britain has lost in Mexico a sum not far short of £150,000,000 sterling represented by exported goods. I say that the Department of Overseas Trade through this scheme can perform a very valuable function in indicating to every export trader whether it is worth while or not to give credit to certain countries. If the Minister says, "Oh, I cannot disclose these things; I must not disclose these things; it is against public policy to say that we have lost money," then I would remind him of the recommendation of Sir Otto Niemeyer's Committee that we should have a much more elaborate set of accounts. In our Civil Appropriation Accounts which came before the Public Accounts Committee—page 250—under the advances scheme, you see a loss of £1,759,000. The sum written off was £1,029,000. In future we want to know where it was lost, and not the name of the firm. We shall want to know which the countries are. Take the first Guarantee Scheme. The amount written off is £53,000, and the amount outstanding £158,000. Where is the money outstanding? Let us know where we are. It says in a footnote:
(a) Further losses will result as outstanding operations are completed.
We must in future examine more closely where our money is lost, and find out the districts on the map where losses take place so that we may keep out of those districts. This should be done not only for the benefit of the Department of Overseas Trade, but for the use of the general body of the trading population.
I remember well—the present Minister was on the Committee with me at the time and I was not then the Minister—that we examined a proposal
that was made to us relating to a large order for English steel for bridges or railway material in some country in South America; it represented a large sum of money. We came to the conclusion that we would grant the credit facilities for the required length of time, and when the representative of the firm came to interview us we said: "Yes, go and get the order and you shall have the facilities that you require." I think the order would have run into something like £1,000,000. The firm could produce the goods and they had obtained the credit available for the length of time they required. But they failed to get the order. Again and again the Department of Overseas Trade tells the House, through the Minister, that so many millions of credits are running, and that we have committed ourselves to grant facilities for so many millions more. Yet much of the latter is never taken up. Why are the granted credits not taken up? That is a point at which the Department could be very helpful and could assist in finding out why we are not getting the orders for goods for which facilities can be granted, It will be found that price not credit is the reason.
To-day, I put a question to the hon. Member about an Indian order for 132 boilers and 66 cylinders; the goods were asked for by the Indian Stores Department. We lost the export order because we quoted 20 per cent. too high. We could supply the goods. There was no question of currency and there was no difficulty about shortage of credit, yet we lost the order. When an order of that kind has been lost, although all credit facilities could have been granted—in this case I do not think it came under the Department of Overseas Trade scheme, but in similar cases where orders are sought for and where prices are put in by British firms and credit arranged under the scheme of the Department of Overseas Trade and we lose the order, then the Department ought to make inquiries to find out the reason why we lost the order. Was it due to foreign tariffs, was it a case of wrong patterns, was it faulty salesmanship, or was it a question of price? If we can find the cause, then we can proceed to eliminate as far as possible the cause of our losing the export order. When I spoke on this subject in a previous Debate I said that
the one great cause of our losing export business was that our goods were too dear. The hon. Member for Dartford (Mr. Mills) at once said: "You want to reduce wages." It makes it difficult if one has to debate in face of accusations of that kind. In a case like the one which I have just quoted, we do not fix the wages; the wages are fixed by the foreign buyer. He says, "What is the price of your locomotives"? We quote a price. He says, "I shall only give one-half, or as may be, 20 per cent. less than that price." We say, "We cannot sell the locomotives at that price; our men could not live at that price." The foreign buyer says, "I do not care twopence or less than twopence whether your men can live or not. That is my price. Take it or leave it. If you leave it, I will take my money elsewhere and your men can go on the dole." And he buys elsewhere 20 per cent. cheaper. Therefore, in these cases we do not fix the wages but the wages are fixed by the foreign buyer.
We have to see whether in all cases it is the fact, that we are losing export orders because the cost of production is too high, and we have to see why the cost of production is too high. There is 20 per cent. more export trade being done to-day in the world than ever before. Before the War we got 14 per cent. of that trade, and to-day we are getting per cent. Take the case which is now agitating our minds a great deal, the woollen textile trade. The world consumes more woollen textiles than ever before. The price for the raw material is a world price. Whether the raw material is required for the woollen trade in this country, or in Czechoslovakia, or elsewhere, the price is the same, but the wages in Poland, in France, Germany and Czechoslovakia are from 50 to 65 per cent. less than the wages here. I do not believe that if some of our mills were run rent free that we should be able to get some of the export orders. I am certain that in regard to some of our cotton mills if no charge was made for interest on capital, they would not get the export orders. The fact remains that we do not get the export orders and our men are out of employment. What is the reason? Is it lack of credit facilities? This is a Bill for giving export credits and for putting men into work. Therefore let us clear up for the benefit of the
Lord Privy Seal, to whom we wish well, for he is trying to get work for us, all matters which are hindering our export trade. Let him know the reason why our export trade is bad. Let him know why, when one-third of our population depend upon the export trade, so large a proportion are out of work. Let him know that it is the cost of production that is losing export orders, not lack of credit facilities, and let us find out why the cost of production is snaking the price of our goods too high. He will find that, notwithstanding everything that he may do, notwithstanding our export credits schemes and the long-term credits that we are giving, we are not getting the orders. The reason why we are not getting the orders is not because we have not the money or means to provide the credits, and it is not a question of rationalisation, but simply that our goods are too dear. We must find a solution for that problem of price. In past years I had to earn my living in selling goods produced by my firm, and I know something about the difficulties of selling in foreign markets, and how easy is the making of bad debts. There are very few customers with whom it is worth while doing business if they want more than 12 months' credit. If a customer cannot meet 90 days' bills, he is not very strong in the back and able to stand shock if disaster should come to him.
We old-fashioned, solid business men connected with the great provincial firms were in the old days, and are still, the backbone of the trading class in this country. We knew nothing about stocks and shares. We often spent 24 hours a day for seven days in the week thinking over our business problems and solving them. [HON. MEMBERS: "Twenty-four hours!"] Yes, often 24 hours a day. I have been awake many a night thinking over what I was to do next day for my firm. We as employers in great firms did not work eight hours a day; we had our hearts in our work and in the problems before us, and we were willing to work long hours. We lived lives very much like the lives of our foremen.
We do not like to do business with people or with nations who want over 12 months' credit. They are living upon overdrafts. It is not genuine industrial business, it is finance. You are being asked to put capital into your customers' business. When people say: "You can-
not get business, because you will have to give over 12 months' credit, and you do not like to give over 12 months' credit." I say that when you have to sell goods to people who want over 12 months' credit it is better to look round the world and see where you can deal with people who want 90 days or 120 days' credit. You will find in the long run that you will make fewer bad debts and do better in the end by doing business on sounder lines with shorter credit than if you give long credit to people who are not strong enough in the back to carry on business unless you provide their capitalisation. A big capital loss by bad debts soon swamps many years' profits. I am heart and soul in the scheme of export credits and I wish it every success. If I can do anything by my vote, my work or my advice to make the scheme more satisfactory and more successful, I shall be very glad to do it.

Mr. R. A. TAYLOR: When we were discussing the Financial Resolution a short time ago, I think it was stated by the Minister that it was the intention on the Second Reading of the Bill to make a statement on the policy of the Government in relation to the problem of long-term credits so far as it affected our export industry. It would have been of advantage to the House if we could have had that statement from the Minister at an early stage of the Debate. We should then have been able to judge as to whether or not we could see our way clear to give whole-hearted support to the Bill. I should like to deal with a matter which has been referred to by the hon. Member for Farnham (Mr. Samuel) and other hon. Members with respect to the Board of Trade figures of imports and exports between this country and Russia which show, apparently, a very heavy trade balance in favour of Russia. It is, therefore, said that there is no need for long-term credits to Russia, and that Russia can buy with the proceeds of her imports into this country a very much larger amount of British goods and manufactures than she does at the present time. We on this side of the House would be glad to give unqualified support to the Government in anything that they can do to make a special agreement with Russia to ensure that a larger proportion of credits raised by her imports into this country are spent in the purpose of British goods. If it is possible for a
special trade agreement to be arrived at on that basis, we shall expect our friends to support the Government in that action.
I want to draw the attention of the House to the real facts in relation to the trade balance of Anglo-Russian relations. Following the signing of the trade agreement in 1921 and down to the end of 1928, according to the Board of Trade returns, Russia imported into Great Britain goods to the value of £131,000,000, while the exports, including re-exports, that is, Russian purchases in Great Britain, were recorded in the Board of Trade returns as amounting to £73,000,000, leaving an apparent balance in favour of Russia of £58,000,000, but the Board of Trade returns do not disclose the whole story so far as it affects the economic relationships between the two countries. Imports are calculated on the basis of declared values at British ports of discharge, while exports and re-exports are calculated on the basis of declared values at British ports of loading. This £131,000,000, representing the value of Russian imports into Britain, was therefore the value at the British port of discharge, but apart from the Board of Trade returns certain charges have to be met out of the values raised by those imports. For instance, in order to conduct business, a number of Russian trading organisations had to be set up in Great Britain, and to maintain those organisations rent, rates and salaries had to be paid and equipment had to be provided. During the eight years under discussion, payments under those heads absorbed £7,000,000. In addition, Russia during that period paid for banking credits in the form of interest and so on £2,750,000. For the insurance of cargoes, many of which were carried in British ships, she paid in London something like £1,000,000. Then there were payments for freight, loading, unloading, storing, packing and sorting. All this has to be deducted from the value of the imports in order to get at the amount which is available for the purchase of British goods. These charges amount to a further £10,500,000.

Mr. ALBERY: From where do these figures come?

Mr. TAYLOR: They are calculated on the Board of Trade returns.

Mr. A. M. SAMUEL: Were these sums paid to us?

Mr. TAYLOR: They were paid to those British people who are engaged in the services of shipping, of insurance and so on, and as salaries and wages, and in the other ways I have indicated. They have to come out of the amount raised by the import of goods from Russia into Britain. I purposely refrained from interrupting the hon. Gentleman when he was trying to develop what he regarded as an intricate economic argument, and I hope that he will permit me to develop my argument, in order that the facts, as we see them, may be fully before the House. Russia, like other countries, has had to purchase from time to time gold and silver and other precious metals, which has absorbed during the period of which I am speaking another £10,500,000, so that by these items we are able to account for £32,000,000 out of the §58,000,000 excess. The hon. Gentleman, with his great experience of international trade, knows that London is the international centre where purchases are made, not only of goods produced in Britain, but of goods produced in our Dominions and in foreign countries. If that business is financed in London, there are items such as brokerage, insurance, freights—all of which must be included in estimating the advantages to Britain of trade between Russia and this country. If Russia buys raw cotton from Egypt or tea from India on the London market, that is giving to India, or to Egypt, purchasing power with which they in turn can buy British goods. From the point of view of the people employed in a factory in Lincoln or elsewhere in this country, if Russia buys tea from the East Indies, that creates purchasing power in the East Indies for the purchase of machinery from the factories here. Thus, that trade, instead of being a disadvantage as hon. Members opposite would seek to make out, is an exceedingly good thing for the people of this country. Those facts must be well understood on the other side of the House, and I am surprised that hon. Members opposite should find it convenient to overlook them when discussing this question.
I wish to put a number of questions to the Minister. First, I ask him to say
clearly and definitely, and without any equivocation, whether or not it is the intention of the Government, if this Measure reaches the Statute Book, to allow the maximum use of the credit terms which it provides. In other words, are the heavy engineering industries to be allowed to place before this advisory committee applications for credits relating to the sale of constructional engineering goods for periods of two, three, or four years, or whatever may be convenient and usual in the case of the particular classes of goods concerned? Are they to be allowed to put these proposals forward with any chance of acceptance? Is it the intention of the Government to use the machinery of this Measure to meet the problem? If it is not their intention to use it in that way, I suggest that the best thing for a Labour Government And a Labour party would be to drop this Bill. It has already been stated in the Report of the Niemeyer Committee that the very people who are to be responsible for considering applications for credit guarantees under this Bill are themselves definitely of the opinion that the use of State credit for this purpose is not justified as a permanent feature of our credit system. On page 9 of the Report the opinion is definitely expressed that the permanent use of State credit is not desirable, and the Committee further express the opinion that the scheme should remain one of relatively short credits. They go on to point out that the major portion of the business was limited to short-term credits extending to about six months, and quite definitely we have had from the Front Opposition Bench approval of this Bill, because the scheme is ultimately going to be handed over to private enterprise when the proposition has been made a paying one.
The fact has already been pointed out from the benches opposite that in the first scheme of this kind, out of guarantees amounting to £1,750,000, the State were landed with a, liability of over £1,100,000 in the form of bad debts. That was not the scheme of a Labour Administration. That was in the days of the Coalition of glorious memory. There we had British capitalists unloading on to the British taxpayer risks which they would not have taken themselves, and the major portion of the transactions which took place resulted finally in the taxpayer having to back the Bill. I know
that that remark relates to a previous scheme and would not be applicable as a criticism of the present arrangement, but I respectfully point out that here is a Department which two or three years ago was threatened with extinction and which now accounts for just over £500,000 in our Estimates; its total turnover represents less than £6,000,000 worth out of a total export trade of £725,000,000, and we have to face the fact that hon. Members opposite are willing that this experiment should continue for another five years, because it is possible that losses will be incurred, while the people who are sitting on the advisory committee and those who are to constitute the new executive committee have quite definitely expressed themselves in favour of so restricting the work of this committee to short-term credit operations that it will be absolutely impossible for the Department to secure sufficient premium income to cover administrative expenses.
In my opinion, the intention of Parliament when it passed the Overseas Trade Acts was to use the credit power of the State to promote employment in this country and, through the use of our State credit, to bring work into the factories of Britain which otherwise would not be likely to come there. The only possible justification for this Measure at all is that it puts unemployed men into work. If hon. Members who have blessed this Bill, and if those who are going to be responsible for its administration, are absolutely determined to prevent this machinery being used for long-term credit purposes the whole thing is useless. It is simply a subsidy—in many cases to bolster up inefficiency—and the Government might as well drop the Bill. We have seen in the D'Abernon Report a statement of some of the causes of our difficulties in relation to the sale of our goods abroad. These difficulties do not arise out of anything for which the workers can be held responsible. They are difficulties for which the captions of industry and the salesmanship of our industrial organisation are responsible; and we cannot hope by methods of this kind, by tinkering about with £4,000,000 or £5,000,000 worth out of £720,000,000 worth of export trade, to deal with those difficulties. Looking around the world to-day, we realise that the hope which we held of recovering our position when the purchasing power of our formal
customers had been restored, was never justified. World trade has increased something like 20 per cent. above its pre-War volume. Great Britain is still suffering from prolonged depression and the problem in our great export industries is the problem of being able to sell their goods abroad at prices which the foreign purchaser is willing to pay.
If we can accelerate the sale of engineering products abroad we can make an immediate and considerable contribution to the solution of our unemployment problem. Taking a comparison in volume, our engineering industries in 1929 exported 3,000 tons of machinery less than they did in 1928 and the export of engineering products was 126,000 tons less than in 1913. Depression in certain branches of this industry is chronic and I want to know whether the Government intend to use this Bill, or whether they have any other proposals to put before the House, for the purpose of meeting the difficulty which, in spite of the experience of the right hon. Gentleman opposite and the views which he has expressed, I know to exist to-day. Those who have intimate knowledge and long business experience recognise the existence of that difficulty.
One of the great reasons we cannot sell the products of our heavy industries abroad is that we cannot offer sufficiently long credits to the Russian market, which, in view of the difficulties that exist in our Dominions and in other markets, at the moment represents the most hopeful market for these products; and one of the great reasons we have been left behind by our competitors and Germany and America have been building up their imports into Russia is that they have been able to offer better credit facilities than we have. The reason for that is that our banks have not been willing to give the same accommodation to firms engaging in Anglo-Russian trade that they have been willing to give in the case of trade with some countries and individuals where they were running far more risk than they would be in dealing with organisations whose payment is virtually guaranteed by the Russian Government.
We are to have under this Bill an Advisory Committee of 15 members, and I want to know whether it is the intention of the Government to revise the constitution of this Committee. I believe that
either 12 or 13 of its members are connected with banking and financial interests and the interests of the iron and steel trade from the employers' point of view. The intention of Parliament was that this machinery should be used to promote employment, and if the Advisory Committee are refusing to allow perfectly sound business, which would provide work in British factories, if the length of credit exceeds 12 months, and if they are to continue to refuse these applications, it is time the Government dropped this Bill and let the Export Credits Department be closed up. Therefore, I ask the Minister whether it is the intention of the Government to place on that Advisory Committee some other representatives than those of banking interests, who will be able to look at it from the point of view of the original intentions of Parliament, in order that those intentions may be carried out.

Sir WILLIAM DAVISON: I am, at any rate, in agreement with the hon. Member for Lincoln (Mr. R. A. Taylor) in this, that I think it is very unfortunate that the Minister should have introduced this very important Measure without any explanation whatever, in view of the many questions which have been addressed to him recently at Question Time, and in view of the definite reference to this matter in the recently concluded trade agreement with Russia. It is practically admitted that one of the main reasons for extending the scope of this Overseas Trade Measure is to enable further credits to be given to Russia, and a great many of us wonder what is the need of special Government assistance being given to Russia for the purchase of goods in this country, when she has a very large trade balance standing to her credit which is available for the purchase of goods here, if she is willing to use it. I understand there is at present a trade balance in favour of Russia in this country of about £36,000,000. The hon. Member for Lincoln gave us a very elaborate statement which would go to show that there is only £26,000,000, and in making that calculation, he took into account the fact that Russia had to make allowances for the purchase of gold, and insurances, and other matters.

Mr. R. A. TAYLOR: I was referring, not to the present balance, but to the experience over the years 1921 to 1928.
The reason I did not deal with the existing situation was that I had not the figures, but the same principles would apply.

Sir W. DAVISON: In any event, over that period of years Russia had a balance of about £26,000,000. She commenced with £58,000,000, and she had the various items to which the hon. Member referred, amounting to £32,000,000, which would give her still a trade balance of £26,000,000. Why is it necessary, from her point of view, for us to give these further credits, and how shall we be better off? We have repeatedly asked whether the present Government adhere to the principle of the previous Government that no further loans will be granted to Russia until she has made arrangements for the payment of the debts which are due to this country. Many of us find great difficulty in understanding what is the difference between a loan and a guaranteed credit. To me, it seems to be a distinction without a difference.
In the last, few weeks we have had the new trading agreement with Russia, and in the Protocol attached to that agreement there are very definite provisions with regard to credit. This Protocol has not been inserted for nothing. It is signed by the Foreign Secretary and by Mr. Sokolnikoff, and we certainly expected that the Secretary to the Overseas Trade Department would have dealt specially with the Protocol in asking for a further extension of this Measure. Let me remind the. House of the wording of the Protocol:
In concluding the present Agreement the Contracting Parties are animated by the intention to eliminate from their economic relations all forms of discrimination.…
In accordance with the above principle, trade between the United Kingdom and the Union of Soviet Socialist Republics shall be eligible for consideration on the same basis as trade between the United Kingdom and other foreign countries in connexion with any legislative or administrative measures which are or may be taken by His Majesty's Government in the United Kingdom for the granting of credits to facilitate such trade.
What is the precise meaning of that, and what difference is it intended to make in the practice which has obtained hitherto? We understand that the practice of the Ministry during recent years has been that not more than 12 months' credit should be given to Russia. Under this Protocol is it intended to make a longer credit than 12 months? It is a very im-
portant matter, upon which we should be informed before passing the Second Reading of this Bill. We have had America referred to, and in some statistics published the other day the imports from Russia to America were shown to be only £2,000,000, but the exports from America to Russia were about £22,000,000. America has no trade agreement of any kind with Russia, and there is no export credits scheme. If America can do this large and increasing business with Russia without either a trade agreement or an export credits scheme, we want some further explanation from the Minister as to why the extension of this scheme is needed, at any rate so far as Russian credits are concerned.

Mr. WISE: We have heard from the hon. Member for Lincoln (Mr. R. A. Taylor) a very interesting statement as to what I should call short long-term credits to supply the needs of the Russian Market, and he pressed the Government to give a credit scheme for that purpose. I was very much interested in what the hon. Member for Farnham (Mr. A. M. Samuel) said about the original conception of the scheme. I wanted to ask him, as he developed his argument, what he meant by long-term credits, but as he proceeded I saw that he meant certainly not what is meant on this side or, I think, generally in financial circles. I think he based a little too much of general principles on his own particular experience in a trade in which no doubt 90 days is a perfectly convenient and usual form of credit. There is a phrase, which I think he will recognise, that "there is nothing like leather," but if you suppose that the experience of the leather trade must be applied to the whole range of trade, you are likely to get into a mess.
What may be suitable for leather or shoes is clearly unsuitable, and has always been regarded as unsuitable, for agricultural machinery, shall we say, in which in nearly every country in the world the International Harvester Company was selling on a basis of credit of two harvests, or a, year and a half or two years, before the War, and in which since the War they have re-created their trade. Obviously that is inapplicable in the case of heavier machinery, engineering appliances, constructional plant, and so on, and I think the failure of the Export Credits Scheme to realise the
purposes for which traders and working people wanted it, that it would really help the export trade, is largely due to the fact that the hon. Member for Farnham, who played so large a, part in framing the scheme, could look at nothing except through spectacles made of leather, and they rather obscured his sight.
7.0 p.m.
The manufacturers generally are finding—and this applies not merely to Russia, but to South America and to trade with various countries in the East—a real difficulty in financing orders which require from two to five years' credit. These are not long-term credits in any general sense, and they are not short-term credits; they are intermediate. Before the War it was not very difficult, because manufacturers generally were able to meet the situation from their own resources, but in this country at this moment, in the great engineering trades, in the steel trade, and in many big manufacturing trades the manufacturers simply have not the capital resources to carry that length of credit. The London market, the London financial machinery, is not really equipped for dealing with the problem. For real investment the issue houses can meet the situation. For short term credits the joint stock banks are admirably equipped. For short trading credits, three months, 90 days or six months, the sort that the hon. Gentleman on the Front Bench opposite had in mind, there is a very admirable machinery in the City of London in the accepting houses. But there is no existing machinery which is capable easily of assisting the manufacturer in dealing with the export trade that requires from one year to three or four years' credit. So far as our main commercial rivals are concerned, that machinery exists. In Germany the relation between the banks and the industry is so intimate that, partly through special trading concerns which the banks set up, the manufacturers can get the finance for that purpose. In America a great bank like the National City Bank has working side by side with it the National City Company, which provides manufacturers with the finance for one, two or three years necessary for that sort of purpose.
But the whole position of the London money market has been that banking and
manufacturing must be kept distinct and apart, and consequently for these new manufacturing trading problems, which the manufacturer is now unable to cope with, the City at this moment is unable to provide him with adequate assistance. The result of that is that British traders and manufacturers in the engineering trade and similar trades are losing business in various quarters of the world. In the present state of our export trade it is a very serious problem to which the attention of the Government ought to be directed. Under the powers taken under this Act, and properly used in a broadminded way but not with microscopic examination lest a few pounds might be lost here and there in bad debts, to which the hon. Member opposite attaches so much importance, the needs of British trade can be assisted.
Anyone who examines the figures of our export trade knows that now is not the time to try to build up our trade on 100 per cent. security. Now is the time for the export trade to begin to show a greater enterprise in making up the ground that has been lost. We have been carrying on for the last 10 years under the assumption that the world trade is at our feet and that we can do what we like about it. The hon. Member opposite constantly reiterated that we should examine this point, so that we should not lose anything. That is the way to lose everything; that is the shortest and simplest way to bring our export trade into an even worse position than it is in at the present moment. I hope, therefore, that the Minister in the administration of this Act will really use it, as it can be used, as a very effective instrument to help British manufacturers in a position in which they need help and in which no other help can be provided. It cannot be obtained easily or conveniently from financial organisations or from the banks at this moment.
I hope also that he will take a broader view of the whole problem of our export trade and its development. I wish he would give some attention to the manner in which Mr. Hoover developed the functions of a precisely similar department in the few years that he was Secretary of Commerce in the United States. He did not spend his time in discovering reasons why he should not do this or that; he visualised the task of his de
partment as effectively to take the lead in developing the trade of America all over the world. As everyone knows, American export trade has increased in the last few years, while our trade has been stagnant or has diminished by leaps and bounds. I am not pessimistic about the possibilities of British trade, provided we are prepared to take a broad and comprehensive view of the problem, and provided we are prepared to take the view that it is worth while to lose a few pence or a few pounds or even a few thousands of pounds here and there in developing a trade that will bring us hundreds of thousands of pounds, perhaps millions, later on.
British export trade was built up in a spirit of adventure. Hon. Members opposite would kill it in a spirit that is afraid to take any risks or any responsibility for leadership or anything else. That way lies destruction. I hope that the hon. Member who now presides over the Overseas Trade Department will realise the tremendous opportunity he has, with this financial assistance at his elbow, for setting in motion schemes of reorganisation of the export trade and export traders which shall have regard, not merely to the possibility in five or 10 years' time of the banks or some of the financial houses being able to make a profit out of this class of business when they have been able to accustom themselves to it, if the export trade then exists, but will have regard to the vital importance of using all the resouroes of the State in assisting trade on big and broad lines. He has the powers there, and I hope very much that he will be able to tell the House that he proposes to use them.

Mr. GILLETT: The various subjects which have been raised by different speakers are in some cases so large that if I were to attempt to deal with them all, I am afraid it would occupy a very considerable time. I have had a number of definite points put to me, and, in the first place, I had better answer those specific points. The right hon. Gentleman who spoke first from the opposite Bench asked me whether I would be willing to consider that the commercial accounts might be published as a separate Paper and not in the Blue Book as at present. I cannot give him any definite undertaking, but I am quite willing to take up that point with the De
partment concerned and ask whether it would be possible, when next the accounts are published, to have separate documents supplied as well as having the accounts published in the Blue Book with other accounts of that description. The next point brings up the question on which hon. Members on the Front Bench seem to argue one way and then, having argued one way, produce another argument. The hon. Member for Farnham (Mr. A. M. Samuel) has been especially distinguished in that way. He expressed his great appreciation of the work of the Advisory Committee. He said that we have the advantages of the services of a number of gentlemen of very great experience in regard to matters of that kind. I entirely agree with him. Having said that, he then asked why it was that we did not let him know a great deal more about the work of the Committee and he said a good deal more which seemed to indicate that, though he had profound confidence in the opinions of those gentlemen, he was not satisfied with the way their recommendations were carried out by the Minister in charge of the Department. As to the point about the maximum for trade with Russia, I might explain that the Committee, when they have before them applications for credits for different countries, are always considering the amount of credit they have granted to those particular countries and the same thing is being done in regard to Russia by the Committee in the ordinary course of their deliberations. I do not think that the hon. Member is suggesting that any different policy should be carried out in connection with Russia to what this very competent Committee, according to the hon. Member, are doing.

Mr. HACKING: This Committee has various functions to carry on and its powers are limited at present by the Department of Overseas Trade and the Government, by Act of Parliament and by regulation. What I am suggesting is that there might be a limit fixed to the amount of money risked in any country, including Russia.

Mr. GILLETT: Yes, but that is just the point we are not proposing to do. My hon. Friend complained that we are being guided by the Advisory Committee. Now, when we are guided
by the Advisory Committee and say that in the amount of credit to be given to Russia at present we have not seen our way to diverge from the recommendations of that committee, the right hon. Gentleman opposite criticises us because virtually we are leaving the matter to that committee. It is a very unfortunate position for the Secretary of the Overseas Trade Department who, so to speak, falls between two stools. He is blamed by those opposite because he does not follow the recommendations of the Committee, by those behind him because he does. Now on the point as to private companies. There is a fundamental difference between the work of our department and any private company now in existence. Under this system, as I informed the Committee when the Financial Resolution was under discussion, the method of granting the credit is virtually to ensure a certain percentage of a bill and, when that bill is dishonoured, a few days after that event has taken place we pay up the definite amount we have guaranteed. No private concern is doing business on those lines. I do not think the hon. Gentleman wants me to detain the House by a full description of the methods of private concerns. That is a most important principle which will be clearly understood by any business man in this House. You know that a few days after the bill has been dishonoured that particular percentage of the money will be given to you by the department.
The next question I was asked was in regard to German credits. I believe the information the right hon. Gentleman has given the House, so far as I can gather, is correct and that the German credit scheme was terminated a short time ago. I ought to say that my information is not absolutely definite, and I should not wish the statement to be taken as literally correct. That is my information.

Mr. HACKING: Is that as far as Russia is concerned, or generally?

Mr. GILLETT: I understand that the scheme terminated was the one applying to Russia. Then the next question the right hon. Gentleman asked me was as to the loss ratio. As I stated, we have only published one definite set of accounts on a commercial basis, and
that is for a period of about, 21 months. Those are the only figures we have had. The figure is 63.4. I explained in ray speech last time why the following year's accounts had not yet been published, and therefore we have no other figures beyond that one. The next question was the one about war materials and whether these credits should be used for the purpose of helping the building of battleships. As the right hon. Gentleman stated, we cannot do so without an Act of Parliament, and we have no intention of asking the House to give us the powers. I suggest to the right hon. Gentleman that even though we had these powers they would be of little use in regard to the case he has mentioned. It was obviously long-term credit almost amounting to a bounty that, was received and decided the destination of the order. The other point he has asked me to deal with was long-term credits. This is the point on which I wanted to say a word or two. Broadly speaking, I agree with what my hon. Friend the Member for East Leicester (Mr. Wise) stated in regard to the need for long-term credits in connection with our export trade. He referred to the facilities given by the German banks, which are different from those provided by our banking system; he also pointed out that in the United States they have special companies which provide these credits for three, four or five years. These were the points upon which I desired to lay stress in connection with the remark that I made when I last spoke on this question in the House.
Quite apart from the question why the Export Credits Guarantee Department have not granted long-term credits to Russia, I want it to be made quite clear that other parts of the world and other sections of our industry want a similar kind of credit. I also want to point out to my Friends who have been disappointed that Russia has not had long-term credit, that the Advisory Committee to a very large extent have usually taken, what might be termed the short-credit view of the situation. It has really been their usual policy to tend to refrain from granting long-term credits to any countries; and it is no change of policy when we find them hesitating to make these long-term credits. This really brings us up against the whole problem
as it has been outlined by my hon. Friend. It has been increasingly impressed upon me, in a number of interviews and otherwise with business men, that the provision of long-term credit is a real need; and I feel that it is a matter that wants to be taken up and investigated by those interested in industry and finance. I am convinced that the matter is receiving the attention of my right hon. Friend the Lord Privy Seal, and I very much hope that something may be done to help to supply what is an undoubted need in connection with our export trade.
With regard to the speech of the hon. Member for Farnham I shall not be lured away from the main problem into a discussion of the reasons for the decline in our export trade. The reasons are so many and varied, that I do not think that I can venture to go into that subject.

Mr. A. M. SAMUEL: I should like the hon. Gentleman to analyse the position when we make a bid for a contract, in cases where his Department will give the required credit, when we find that we do not get the order. Why not face that difficulty and see whether our goods are too dear or not? Quite apart from the matter of facilities of long credits, our goods, as were shown to-day by the answer which the hon. Gentleman gave me—

Mr. SPEAKER: The hon. Gentleman has already made a speech.

Mr. SAMUEL: I just want to point out that it was not lack of credit, because the hon. Gentleman showed that we lost this engineering store order because it was 20 per cent. too dear. That is a point about which the Department ought to investigate. Are our goods too dear or not?

Mr. GILLETT: As a matter of fact, this is going outside the scope of the Bill which we have before us, but I informed the hon. Member in regard to that question that we are investigating the matter. With regard to the main question as to why firms are failing to secure contracts, I am afraid that opens up a vast field. As the hon. Member has indicated, there may be a question of wages, and there may be questions of tariffs and finance, and any number of questions may be brought up, and how can this Department be supposed to enter
into all these problems which go right into the heart of a, mass of political questions? I do not agree with the hon. Member in thinking that it is possible to give more information publicly in regard to the conditions of some of the countries with whom we have been doing business. I rather regret that he mentioned certain countries because I do not think that a discussion of this kind is very helpful. Although there have been difficulties in connection with one of the countries that he mentioned, I do not think that they apply at the present time. He knows perfectly well, as he was a member of the Committee, that the position of a country fright change; we might find at first that we could do business with it, and then circumstances might arise which made it undesirable to continue to do business. It would be impossible to go and tell the business world these things publicly, but the information is supplied either indirectly or directly by their contact with our Department when they come to ask for information.
My hon. Friend the Member for Lincoln (Mr. B. A. Taylor) put one or two questions, but I am afraid that. I cannot answer him any further than the statement which I have already made with regard to the position of long-term credits. There has been no change so far in the policy which is being followed by the Advisory Committee. This policy is constantly receiving our careful consideration. When he states that if we are not prepared to extend the length of these credits the Department ought to be, closed, I would point out that a larger amount of business is being done with Russia than with any other country, and if we have not exactly provided the credit for which he is anxious, the credits that have been given have been successful in opening up increased trade with Russia. The hon. Member for South Kensington (Sir W. Davison) asked why we give these credits to Russia, but I think that the object is so evident that he must have appreciated that we are anxious to open up trade in order to assist our export trade, and also to find some work for the unemployed.

Sir W. DAVISON: I was referring to the large trade balance in favour of Russia.

Mr. GILLETT: I agree that we have these figures, but the hon. Member has
perhaps forgotten the actual goods that are being purchased. If he investigates the figures, he will find that several millions a year are being spent, or were being spent, by Russia in purchasing raw cotton, and it is raw materials to a large extent that Russia is purchasing in America. It is obvious that this country cannot supply these raw materials. Russia has to get its raw materials, and it cannot get them in this country, and the only other question is how far it is possible for Russia to buy more of her machinery and articles of that kind from us. That is a matter which is receiving the attention of the Government, and I hope that more purchases may be the result of the better understanding which has been brought about owing to the renewal of relationship between this country and Russia. I should like to draw the hon. Member's attention also, seeing that he asked a question as to the difference between loan and credit, to the statement of the Vice-Chairman of the great Imperial Chemical Industries, whose authority I am sure he will recognise. At the annual meeting of that body, when he was seconding the reception of the report, the Vice-Chairman made this statement:
Publicity has been given in many newspapers to the contract we have made with the Russian Government, but I would like to remove what is possibly a misconception in the minds of our shareholders. It has been stated in one or two papers that we are giving a loan to the Russian Government. It is not so. What we have done is to sell our products on extended terms of credit, which, however, in our opinion, are quite satisfactory, for any possible risk is adequately covered by insurance.
The hon. Member and the hon. Member for Farnham have been arguing for some time that we are making a loan to Russia by these export credits, and I hope that the words of an authority like the Vice-Chairman of Imperial Chemical Industries will show them that there is something in the case which we have nut forward. If the hon. Member for Farnham is unwilling to accept those words. I feel, at any rate, that we have a good authority at the back of us.

Miss WILKINSON: The hon. Gentleman the Secretary to the Overseas Trade Department has complained that owing to the suggestions that have been given to him from both sides of the House, he is likely to fall between two stools. I
suggest that it would in those circumstances be better if he sat firmly on one. If he follows out not only the line that he has made in his speech but also the line laid down in the White Paper before us, falling between two stools is what is likely to happen. Those of us on this side of the House who have pressed for an increase in the period during which export credits should be given—and we have had Russia chiefly in mind—welcome this Bill, but feel that the effect of it will be largely nullified if we are to take as representing the mind of the Government the statement of the Secretary to the Department that they have never in fact deviated from the advice of the Advisory Committee and inferentially that they do not propose to deviate from it. On page 11 of the White Paper they do not suggest any change in the composition of the Advisory Committee.
The previous Government which was notorious in its bitter antagonism to any extension of Russian trade appointed an Advisory Committee. Naturally they appointed the sort of gentlemen whose general outlook agreed with them. Naturally I should be surprised if they had not done so, but from their point of view they took jolly good care what its report was going to be before it was issued. I suggest that this Advisory Committee has very faithfully carried out the general views of the people who appointed it, but I cannot understand why, with the exception of a trifling change or two since the present Government came into power, we are still to have that Committee dominating the position in regard to trade with Russia. If we extend the facilities but allow the same Committee to have exactly the same power as before, and say beforehand that we are going to take its advice, I fail to see that the position will become very much better.
I am particularly keen on this matter, because I represent a constituency which is desperately keen about it. The heavy constructional iron and steel industry there is very much depressed, and we feel that the Government ought not merely to take up a position of benevolent neutrality or gentle friendliness towards this question of Russian trade, but very actively set out on the job of seeing how this trade with Russia can be extended in every possible direction, in order to secure business
for the heavy iron and steel industry. We do not want an attitude of benevolent neutrality and of gentle friendliness, a feeling that it would be very nice if trade could be done. We expect the Government to make it clear to the bankers that there is a change of policy because this Government have come into power. I am not blaming the bankers. The bankers do not represent the unemployed of this country, but this Government do. The Government are continually concerned about unemployment, but I suggest that in leaving the question of policy so very largely in the hands of this committee, appointed by the previous Government, they are nullifying their own intentions as expressed in this Bill.

Mr. PYBUS: Is the hon. Lady aware that a new advisory council has been appointed by the Department of Overseas Trade?

Miss WILKINSON: May I refer the hon. Member to page 11 of the White Paper where it states:
We do not suggest any great change in the position of the Advisory Committee.

Mr. PYBUS: But a new advisory council has been appointed; there is a new personnel.

Miss WILKINSON: I think that the hon. Gentleman has not read the whole of page 11. If he will read it with the care which he usually bestows on these matters, he will see that what is happening is that a small executive committee is being appointed because it is difficult to get so many members of the whole committee together. At the same time it is definitely stated:
We do not suggest any great change in the position of the Advisory Committee.
That is the point to which I am objecting. I suggest that unless there is a very radical change in the position of the advisory committee the effect of this Bill will be largely nullified. An hon. Member raised the question of why Russia does not make use of the large credit balance she has in this country for trading with this country. The same point was raised when I brought up the question of Russian trade on a previous occasion. The hon. Member forgets that our trade balance with Canada is five to one against us and that our trade balance with the Argentine is three to one against us. If we are to follow that line
of argument we should not finance trade with either of those countries, with which, as a matter of fact, we do a large export trade. It has been repeated ad nauseant, though these gentlemen who have this obsession about Russia will never be convinced, that the reason for this trade balance is the fact that Russia finances through London banks and houses the whole of her purchases of wool, of Egyptian cotton, of tin and of various other Empire products, and wages are paid in London because of that financial business which is going forward. In addition, there are all the visible exports. There is the cost of storage and the cost of transit of these goods, all of which is financed out of what appears to be a large credit balance, and it is utterly irrelevant to say that that sum of money, which is being used for those purposes, can be used to facilitate the sort of trade we want to do with Russia.
I ask the hon. Member to realise the position of those of us who come from the great northern areas which are decimated, one might say, by unemployment. Whatever the Lord Privy Seal does in the way of road making and bridges will be all very well in its way, but we shall be only touching the fringe of the problem unless we get new markets. Over and over again we have been told in this House and by the newspapers that foreign markets are closed to us partly by tariffs and partly because those countries are now manufacturing goods for themselves. Here is a market that is not closed to us. It is a country which is anxious to trade: it is an almost ideal market, if only we will look at it free from political prejudice. It is a country with 100,000,000 peasants, largely engaged in agriculture, a country starved of the very goods which could be produced in this country and the sale of which could be assisted by this Bill.
I, myself, have seen the peasants there ploughing with wooden ploughs—and this in the richest agricultural country in the world. It is a country which could supply us with raw materials which we need, and there are possibilities of trading which would go a long way towards solving the problem of unemployment in this country, which has become so top heavy industrially. What has stood in the way of that trade is the invincible determination of hon. Members opposite that, come what may, the workers' Gov-
ernment in Russia shall not be allowed to succeed. That is what it boils down to. The Russian Government have over and over again offered to open negotiations with regard to the question of debts, but whenever there was a chance of those negotiations being successful the party opposite have taken jolly good care that political interference made it impossible. That is why I plead so desperately that we should use this Bill to the uttermost; it should not be put in swaddling clothes at its birth and prevented from growing by allowing the advisory committee to remain as it is.
Our hundreds of thousands of unemployed cannot afford to see the position left as it is. Future generations will be astonished at the utter foolishness of men who were so short-sighted that they could not see that here was a possibility of doing a trade which would remove many of the difficulties with which we are faced in our own country. The Russian Government of to-day is one of the most conservative Governments, in the best sense of the word, that there is in the world. I do not use "conservative" as indicating the somewhat irresponsible and adventurous gentlemen who are called Conservatives in this country. I use it to indicate a Government which has set out really to conserve and to develop the interests of the people whom it represents. This five years' plan, this rebuilding of a country, is one of the most fruitful ideas there is in the world to-day, in a world where everything is suffering from the chaos of individualism, is suffering from the muddle that capital has made, wherever we may look, whether in Germany or the United States or in any other country.

Mr. SPEAKER: I think the hon. Member is going very far beyond the terms of this Bill.

Miss WILKINSON: I beg your pardon, Mr. Speaker, and I will come back to this point. The rebuilding of a country is going on, and there is a demand for the goods that we can make. Here is a Bill which can be used to finance trade with that country. It will make it possible, on the one side, for that country to be re-equipped, and on the other side it will help us to tide over the period of which the Lord Privy Seal has spoken, the terrible period of rationalisation.
This Bill is the bridge which can be used to bring the solution of those two problems nearer. When first I saw this Bill I regarded it as a must hopeful thing for unemployment, and that is why I was so terribly disappointed on hearing the Secretary of the Overseas Trade Department say and in reading in the White Paper that very little change was to be made in the advisory committee. If it be not too late—and we are only at the Second Reading stage of the Bill—may I appeal to the hon. Member to take into further consideration both this White Paper and those words of his? May I appeal to him to make radical changes in the advisory committee; or, if he feels that the committee are quite the best collection of gentleman that can be produced, will he make it clear that at least the policy behind the committee shall be changed? It is only a change of policy which will make this Bill do what we want it to do, and that is to bring some hope to the thousands of unemployed men who the looking for this Government to provide work.

Question put, and agreed to.

Bill read a, Second time.

Bill committed to a Committee of the whole House for To-morrow.—[Mr. Gillett.]

BOARD OF EDUCATION SCHEME (DEVON, CREDITON EXHIBITION FOUNDATION) CONFIRMATION BILL.

Order for Second Reading read.

The PRESIDENT of the BOARD of EDUCATION (Sir Charles Trevelyan): I beg to move, "That, the Bill be now read a Second time."
I hope that the House will accept this Bill with no appreciable discussion. It deals simply with a small local scheme framed by the Board of Education under the Charitable Trusts Act. A proportion of the gross income of the Church Corporation Trust at Crediton is payable to the Crediton Exhibition Foundation. Owing to the increase of local rates, the apportionment has given an unforeseen and unintended advantage to the Exhibition Foundation at the expense of the Church branch of the Trust. The scheme remedies this, apportioning the net income in a, manner agreed to
between the parties concerned in the parish, and the county education authority. I hope that the House will accept the Bill.

Question put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the whole House for To-morrow.—[Sir C. Trevelyan.]

INVERGORDON WATER SUPPLY BILL.

Order for Second Reading read.

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Mr. Ammon): I beg to move, "That the Bill be now read a Second time."
Let me state shortly the purpose of the Bill. By this Bill the House is asked to confirm certain agreements which have been made between the Admiralty, the Invergordon Town Council and the Ross and Cromarty County Council. The position shortly is that tale town of Invergordon had a small but adequate water supply, and outside near the town there were certain water courses which it was desired to tap chiefly in order to carry out the obligation to supply water to the neighbouring village of Alness. Then came the War, and the Admiralty came in with much larger needs. Certain works had to be carried out very hurriedly at the expense of the Admiralty but nominally under the authority of the town council. Now it is thought that it is necessary to hand over certain holdings, such as pipes, etc., belonging to the Admiralty, and certain arrangements have to be made with the county council to determine as to the properties which were passed over during the War period. These have been agreed to by the separate bodies, and this Bill is to im-
plement the agreement. The reason we have to come to the House instead of doing it by administrative Order is that according to the Public Health (Scotland) Act, 1897, a public authority has power to get rid of its surplus water, but our legal authorities advise us that that cannot be interpreted to mean a regular and constant supply of 60,000 gallons a day in the one case and 8,000 gallons a day in another case. As this is a constant supply, it is necessary for us to come to the House in order to secure the proper authority.

Question put, and agreed to.

Bill read a Second time.

Bill committed to a, Select Committee of Seven Members, Three to be nominated by the House and Four by the Committee of Selection.

Ordered, That all Petitions against the Bill presented three clear days before the meeting of the Committee be referred to the Committee; that the Petitioners praying to be heard by themselves, their Counsel, or Agents, be heard against the Bill, and Counsel heard in support of the Bill.

Ordered, That the Committee have power to send for persons, papers and records.

Ordered, That Three be the quorum.—[Mr. Ammon.]

The remaining Orders were read, and postponed.

ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Mr. T. Kennedy.]

Adjourned accordingly at Ten Minutes before Eight o'Clock.